Question 5

Polaris Sdn Bhd was incorporated on 1 February 2012. Its accounts are made up to 31 December annually. The company bought a piece of land for RM120,000 for the purpose of constructing a factory. Various expenses were incurred in the construction of the factory as follows:

Date	Expenditure	Amount (RM)
1 February 2012	Legal Fees (of which RM4, 000 was related to acquisition of site)	20,000
1 April 2012	Architects Fees	22,000
16 April 2012	Payment to local authority for approval of plan	8,000
30 April 2012	Cost of travelling land	40,000
3 October 2012	Construction costs	740,000
30 November 2012	Wiring and plumbing	100,000

The building was completed on 23 December 2012 and the company commenced its business on 15 January 2013. The building was wholly used as factory until it was sold to Ciel Silver Sdn Bhd on 1 April 2016 for RM1,000,000 of which RM200,000 was related to the cost of land.

Ciel Silver Sdn Bhd has been in business for a number of years and used 80% of the building as a factory and the remainder as an office.

Ciel Silver Sdn Bhd makes up its account to 30 September annually. Due to business expansion, Ciel Silver Sdn Bhd constructed another building which it uses as a factory. The qualifying expenditure for this was RM240,000. The building was completed on 15 December 2019 and was brought to use on 10 January 2020.

Required:

Calculate the industrial building allowance for each company for the relevant years of assessment up to YA 2019.

Notes:

Clearly show your workings and refer to the allowance rate at page 16 17.

[13 marks]