QUESTION 3 Sunny Tan has just started his own business in Aloha Pte Ltd. He has been presented the first set of accounts of his business, done by his newly engaged accountant. He is unsure of a few items and requests your help in explaining to him on whether the following expenses can be claimed: 1. Paid $500 for his daughter's 21st years old birthday party. His staff attended the party to celebrate his daughter's birthday as well. 2. Paid for freight on importing fresh seafood of $1,900. 3. Dinner and dance event during the month of December. Customers and all staff attended this event. This event costs a total of $35,000 at Park Royal. 4. Engaged a designing firm, to register the business logo for the first time. Registration fee of $1,500 was paid. 5. A customer, Reiki Foods, has ceased operations during the pandemic. The amount owing to the company is $3,990 6. Incorporation fee of $1,500 was paid for company incorporation. 7. Depreciation expense of $250 for office equipment. 8. In October 2022, he withdrew $8,000 from the business bank account, with no reasons provided to date. 9. Purchased computers and tablets for use in the office to the value of $14,500. 10. Paid $4,500 to a consultant for setting up a new subsidiary in Indonesia. Required: Explain, in detail, to Sunny Tan on the reasons as to why each of the item above is deductible or non-deductible. [Total: 20 marks] QUESTION 3 Sunny Tan has just started his own business in Aloha Pte Ltd. He has been presented the first set of accounts of his business, done by his newly engaged accountant. He is unsure of a few items and requests your help in explaining to him on whether the following expenses can be claimed: 1. Paid $500 for his daughter's 21st years old birthday party. His staff attended the party to celebrate his daughter's birthday as well. 2. Paid for freight on importing fresh seafood of $1,900. 3. Dinner and dance event during the month of December. Customers and all staff attended this event. This event costs a total of $35,000 at Park Royal. 4. Engaged a designing firm, to register the business logo for the first time. Registration fee of $1,500 was paid. 5. A customer, Reiki Foods, has ceased operations during the pandemic. The amount owing to the company is $3,990 6. Incorporation fee of $1,500 was paid for company incorporation. 7. Depreciation expense of $250 for office equipment. 8. In October 2022, he withdrew $8,000 from the business bank account, with no reasons provided to date. 9. Purchased computers and tablets for use in the office to the value of $14,500. 10. Paid $4,500 to a consultant for setting up a new subsidiary in Indonesia. Required: Explain, in detail, to Sunny Tan on the reasons as to why each of the item above is deductible or non-deductible. [Total: 20 marks]
