Question 3

SHS Sdn Bhd, a company resident in Malaysia is engaged with manufacturing precision tools for export. It makes up accounts annually to 31 December. The following are some of the assets owned by the company:

Machinery

A machinery costing RM55,000 was acquired for business in Vietnam on 1 August 2017. As the branch is downsizing its operation, this machine was brought into the business in Malaysia on 1 July 2018. The market value and net book value of the asset on the date of transfer were RM46,000 and RM50,000 respectively. A site was prepared for the installation of the machine and the cost incurred was RM8,900.

Motor Vehicle

A second hand motor vehicle (a Toyota car) had been bought on hire purchase. A down payment of RM20,000 had been made on signing the agreement on 1 March 2018. The hire purchase price and the cash price of the motor vehicle were RM68,000 and RM60,000 respectively.

The term of agreement stipulated that the balance of payment is to be made by 24 equal installments. The instalments are to be made up of RM2,000 each with the first installment due on 1 April 2018. It has been agreed by the Director General of Inland Revenue Board that 20% of the vehicle was used for personal purpose.

REQUIRED:

Compute the Capital Allowances for all relevant years of assessment up to year of assessment 2019. (10 Marks)