QUESTION 5 Cergas Sdn Bhd is a manufacturing company situated in Balik Pulau, Pulau Pinang, plans to produce a promoted product that qualifies either pioneer status or investment tax allowance (ITA). The projected profit and loss of the company for the relevant years are as follows: Year of assessments Adjusted income/(loss) 150,000 Capital allowance (RM) 120,000 2021 2022 (65,000) 70,000 2023 235,000 80,000 2024 80,000 85,000 2025 120,000 87,000 The capital expenditure on the project is as follows: Year of assessments Land (RM) Factories (RM) Plant and Residential Property (RM) Machinery (RM) 2021 237,000 84,000 24,000 350,000 2022 65,000 18,000 2023 25,000 2024 2025 Additional information: 1. Residential property acquired in the year 2021 is for the use of the company's director. 2. Assume that the income tax rates for the years of assessment 2021 to 2025 is as follows: 2021 2022 2023 2024 2025 24% 24% 23% 23% 23% Required: a) Calculate the tax liability and exempt income account for year of assessments 2021 to 2025 if the company opts for pioneer status. (12 marks) b) Calculate the tax liability and exempt income account for year of assessments 2021 to 2025 if the company opts for investment tax allowance (ITA). (12 marks) c) Give your opinion on the choice of incentives that the company must opt. Provide your evidence. (4 marks) d) Explain the taxability of the dividend received by shareholders of Cergas Sdn Bhd if the company pays the dividend out of its exempt income account. (2 marks) QUESTION 5 Cergas Sdn Bhd is a manufacturing company situated in Balik Pulau, Pulau Pinang, plans to produce a promoted product that qualifies either pioneer status or investment tax allowance (ITA). The projected profit and loss of the company for the relevant years are as follows: Year of assessments Adjusted income/(loss) 150,000 Capital allowance (RM) 120,000 2021 2022 (65,000) 70,000 2023 235,000 80,000 2024 80,000 85,000 2025 120,000 87,000 The capital expenditure on the project is as follows: Year of assessments Land (RM) Factories (RM) Plant and Residential Property (RM) Machinery (RM) 2021 237,000 84,000 24,000 350,000 2022 65,000 18,000 2023 25,000 2024 2025 Additional information: 1. Residential property acquired in the year 2021 is for the use of the company's director. 2. Assume that the income tax rates for the years of assessment 2021 to 2025 is as follows: 2021 2022 2023 2024 2025 24% 24% 23% 23% 23% Required: a) Calculate the tax liability and exempt income account for year of assessments 2021 to 2025 if the company opts for pioneer status. (12 marks) b) Calculate the tax liability and exempt income account for year of assessments 2021 to 2025 if the company opts for investment tax allowance (ITA). (12 marks) c) Give your opinion on the choice of incentives that the company must opt. Provide your evidence. (4 marks) d) Explain the taxability of the dividend received by shareholders of Cergas Sdn Bhd if the company pays the dividend out of its exempt income account. (2 marks)