Question $2$

Income Statement of Syarikat Kita Sdn$.$ Bhd$.($SKSB$)$ for the year ended $31$ December $2021$ is as

follows:

Note RM$\text{'}000$ RM$\text{'}000$

Sales $115,000$

Cost of sales $1(85,000)$

Gross profit $30,000$

Less:

Selling and distribution $21,200$

Administration expenses $312,050$

Other operating expenses $7,800(21,050)$

Add: Other income

Interest income from overdue trade receivables $50$

Profit before taxation $9,000$

Other information:

$1)$ Cost of sales includes the following:

$($i$)$ Depreciation of assets amounted to RM$7$ million.

$($ii$)$ SKSB entered into a three$-$year rental agreement for a factory for RM$15,000$ per

month in January $2021.$ The company agreed and paid RM$480,000$ being total

rental for the three$-$year period in advance to the landlord.

$2)$ Selling and distribution expenses include:

$($i$)$ Sponsorship of foreign arts and cultural activities for RM$600,000.$ Approval from

the relevant Ministry obtained.

$($ii$)$ Realised exchange gain from settlement of trade receivables of RM$50,000.$

$($iii$)$ Entertainment expenses incurred on hampers in total of RM$400,000$ given to

purchasers of the company$$s products as part of a sales promotion campaign.

$3)$ Included in administration expenses are the following:

$($i$)$ Statutory audit fees of RM$30,000.$

$($ii$)$ Donation in kind of RM$150,000$ to approved charitable institution.

$4)$ Capital allowances computed for year of assessment $2021$ amounted to RM$8$ million.

Taxation $1($BAAB$1043)$ CONFIDENTIAL

Assignment $25\%$

$4$

Required:

Starting with profit before tax, compute the chargeable income of Syarikat Kita Sdn Bhd $($SKSB$)$ for

year assessment $2021.$

Note: Your computation must follow the description used in the notes to the profit and loss

account, indicating $$Nil$$ for every item that does not require adjustment.

$($Total: $20$ Marks$)$