Question $2$

Mrs$.$ Aminah is the owner of Aroma Confections, a small confectionery in Ipoh. The business

closes its accounts annually on $31$ December. Below is the $2023$ Statement of Profit or Loss.

Statement of Profit or Loss for the year ended $31$ December $2023$

Sales

Less: Cost of goods sold

Gross Profit

Add: Other income

Dividend

Rent received $(1\mathrm{.}1\mathrm{.}2023$ to $31\mathrm{.}12\mathrm{.}2023)$

Gain on disposal of van

Less: Operating expenses

Salaries, bonus and EPF

Transportation

Water and eQuestion $2$

Mrs$.$ Aminah is the owner of Aroma Confections, a small confectionery in Ipoh. The business

closes its accounts annually on $31$ December. Below is the $2023$ Statement of Profit or Loss.

Statement of Profit or Loss for the year ended $31$ December $2023$

Note RM RM

Sales $510,000$

Less: Cost of goods sold $1(135,000)$

Gross Profit $375,000$

Add: Other income

Dividend $4,300$

Rent received $(1\mathrm{.}1\mathrm{.}2023$ to $31\mathrm{.}12\mathrm{.}2023)412,000$

Gain on disposal of van $1,90018,200$

$393,200$

Less: Operating expenses

Salaries, bonus and EPF $2102,200$

Transportation $33,400$

Water and electricity $43,300$

Insurance $53,400$

Entertainment $62,600$

Fees and donations $75,900$

Depreciation $6,200$

Bad debts $85,000$

Rates and taxes $95,800$

Repair and maintenance $108,000$

Rent $115,200(151,000)$

Net Profit $242,200$

Notes:

$1.$ Aminah took goods valued at RM$1,200$ at cost for personal use, and this amount was included

in the cost of goods sold. The market value of these goods was $25\%$ higher than the cost.

$2.$ Aminah received a monthly salary of RM$3,500$ and contributed RM$500$ to the EPF every

month. Ali and Zara, two permanent employees at the confectionery, earned monthly salaries of

RM$1,800$ and RM$1,500,$ respectively, with EPF contributions of RM$400$ and RM$250$ each

month. Zara is a physically disabled person, as approved by the Department of Social Welfare.

All of them received a year$-$end bonus equal to a month's salary.

$3.$ The transportation costs included carriage inwards at RM$2,000$ and carriage outwards at

RM$800.$ Also, a flight ticket costing RM$390$ for Aminah's son, Idris, was paid for using the

business account.

$4.$ For the last three years, Aroma Confections has operated out of a three$-$storey building in

Ipoh, and it has generated rental income by renting out the top floor, which accounts for one

third of the building's total space. The confectionery is responsible for two$-$thirds of the water

and electricity costs, while the remaining third is charged to the tenants on the top floor.

$5.$ Insurance costs included RM$1,250$ for Aminah's medical insurance, RM$1,360$ for her

children's educational insurance, and RM$790$ for the van's insurance.

$6.$ Entertainment expenses were distributed as follows: $30\%$ on hampers given to customers, $50\%$

on a Langkawi trip as a reward for employees who achieved their sales targets, and the

remaining $20\%$ on entertaining potential clients.

$7.$ Fees and donations details are as follows:

Payment made to trade debt collectors

Cash donation to an approved institution

Renewal fee for a business loan for working capital

Late penalty fee for business license renewal

Cash donation to an approved library $($apply s$44(8))$

RM

$400$

$1,000$

$100$

$300$

$4,100$

$8.$ Of the total bad debts written off, $50\%$ were related to trade debts, and the remaining $50\%$

were loans given to employees.

$9.$ For Aroma's three$-$storey building, the quit rent was RM$600,$ and the assessment fee was

RM$1,200.$ The road tax for the company's van amounted to RM$100,$ while Aminah faced income

tax penalties of RM$3,900$ for the year of assessment $2022.$

$10.$ The repair and maintenance expenses included RM$5,200$ for renovations to the reception area

and RM$2,800$ for acquiring a new oven.

$11.$ The rental expenses were equally divided between two motorbikes, with one primarily used

by Zara for business$-$related tasks and the other used by Aminah's son, Idris.

$12.$ The balancing charge and capital allowance for the year $2023$ amounted to RM$1,400$ and

RM$4,200,$ respectively.

Other information:

Aminah is a single mother. As of $1$ January $2023,$ she and her husband had officially divorced

due to irreconcilable differences that emerged over the years. Following her divorce on $1$ January

$2023,$ Aminah received RM$2,100$ in monthly alimony.

She claimed reliefs for her children: Adam $(14,$ disabled$),$ Faris $(18,$ in secondary school$),$ and

Idris $(21,$ attending Universiti Sains Malaysia for a finance degree$).$

She also paid RM$8,500$ for her $67-$year$-$old mother's medical expenses.

$8$

She donated RM$26,000$ in medical equipment to an approved healthcare facility.

An unabsorbed business loss of RM$14,000$ was carried forward from the previous year.

Required:

Calculate Aminah's chargeable income for the assessment year $2023.($Every item

mentioned in the notes must be included in your computation, regardless of whether an

adjustment is required. Where no adjustment is required, indicate 'NIL' in the appropriate

column.$)$