Question 3 Delta Berhad, a resident manufacturing company, is 70% Malaysian-owned and is a manufacturer of air conditioners. The income statement for the year ended 31 May 2020 is as follows: Note RM8000 RM 000 Turnover 80.800 Cost of sales (57,880) 22,920 Dividend income Interest income 120 60 180 23,100 3 3,600 4 780 18 5 3,388 924 6 6 Salaries, wages and bonuses Employees Provident Fund Donation Advertising Rental of premises Foreign exchange loss Maintenance of plant and machinery Bad and doubtful debts Depreciation Other operating expenses allowable) 7 137 00 8 118 0. 1,018 840 2,654 (13,477) 9,623 Profit before taxation Notes: 1. Cost of sales is arrived at after crediting RM48,000 in respect of the cost of goods manufactured by the company, which were withdrawn from stock for use as fixed assets by the company. The normal selling price was RM68.000. 2. On 5 May 2020, Delta Berhad received single-tier dividend amounting RM120,000. 3. Salaries, wages and bonuses: Staff were paid three months bonus based on their wages of RM960,000 whereas executives and directors were paid four months bonus based on their salaries of RM1,800,000 4. The Employees Provident Fund contribution is at the rate of 15% for staff and 25% for executives and directors. 5. Advertising includes cost of developing a website of RM100,000 6. Included in rental of premises is a sum of RM24,000 paid in respect of the early termination of the lease of a building which the company vacated in March 2020. The lease was to have run for another ten years. The building was no longer suitable as a showroom for the company's goods. 7. The foreign exchange loss is in respect of the purchase of component parts for manufacture. The realised loss amounts to RM7,000 only. 8. Maintenance of plant and machinery includes the installation cost of a machine amounting to RM18.000. 9. Bad and doubtful debts comprise: RM,000 Bad debts recovered (120) Specific provision brought forward 951 General provision brought forward 1,205 Bad debts written off 120 Specific provision carried forward 1,375 General provision carried forward 1,799 The specific provision carried forward includes a sum of RM18,000, being the balance of a personal loan granted to a director who has now resigned from the Board. 10. Capital allowances have been computed at RM1,002,000 for the year of assessment 2020. REQUIRED: Starting with the net profit before taxation, compute the chargeable income of Delta Berhad for the year of assessment 2020. Note. Every item mentioned in the notes to the accounts must appear in your computation, whether or not it is deductible, taxable or no adjustment is necessary. Where no adjustment is required indicate Nil' under the appropriate column. Question 3 Delta Berhad, a resident manufacturing company, is 70% Malaysian-owned and is a manufacturer of air conditioners. The income statement for the year ended 31 May 2020 is as follows: Note RM8000 RM 000 Turnover 80.800 Cost of sales (57,880) 22,920 Dividend income Interest income 120 60 180 23,100 3 3,600 4 780 18 5 3,388 924 6 6 Salaries, wages and bonuses Employees Provident Fund Donation Advertising Rental of premises Foreign exchange loss Maintenance of plant and machinery Bad and doubtful debts Depreciation Other operating expenses allowable) 7 137 00 8 118 0. 1,018 840 2,654 (13,477) 9,623 Profit before taxation Notes: 1. Cost of sales is arrived at after crediting RM48,000 in respect of the cost of goods manufactured by the company, which were withdrawn from stock for use as fixed assets by the company. The normal selling price was RM68.000. 2. On 5 May 2020, Delta Berhad received single-tier dividend amounting RM120,000. 3. Salaries, wages and bonuses: Staff were paid three months bonus based on their wages of RM960,000 whereas executives and directors were paid four months bonus based on their salaries of RM1,800,000 4. The Employees Provident Fund contribution is at the rate of 15% for staff and 25% for executives and directors. 5. Advertising includes cost of developing a website of RM100,000 6. Included in rental of premises is a sum of RM24,000 paid in respect of the early termination of the lease of a building which the company vacated in March 2020. The lease was to have run for another ten years. The building was no longer suitable as a showroom for the company's goods. 7. The foreign exchange loss is in respect of the purchase of component parts for manufacture. The realised loss amounts to RM7,000 only. 8. Maintenance of plant and machinery includes the installation cost of a machine amounting to RM18.000. 9. Bad and doubtful debts comprise: RM,000 Bad debts recovered (120) Specific provision brought forward 951 General provision brought forward 1,205 Bad debts written off 120 Specific provision carried forward 1,375 General provision carried forward 1,799 The specific provision carried forward includes a sum of RM18,000, being the balance of a personal loan granted to a director who has now resigned from the Board. 10. Capital allowances have been computed at RM1,002,000 for the year of assessment 2020. REQUIRED: Starting with the net profit before taxation, compute the chargeable income of Delta Berhad for the year of assessment 2020. Note. Every item mentioned in the notes to the accounts must appear in your computation, whether or not it is deductible, taxable or no adjustment is necessary. Where no adjustment is required indicate Nil' under the appropriate column