Question

Anthony runs a coffeeshop known as Jom Ngopi located in Cyberjaya, Selangor. The 2021s business income and expenses of the business are available as below :

RM

Turnover 2,095,000

Cost of sales 40% from the turnover

Salaries and wages 294,000 (Note 1)

Bonus 69,000 (Note 1)

EPF 80,780 (Note 1)

Staff training costs 21,000

Travelling allowance 20,000 (Note 2)

Entertainment allowance 5,000 (Note 3)

Water and electricity charges 20,000

Purchase of new coffee machine 150,000 (Note 4)

Premise insurance 6,600

Rental of restaurant 56,000

Depreciation 66,200

Miscellaneous expense 65,000 (Note 5)

Marketing expense 15,000

Notes:

1. a. Salary and wages includes monthly salary paid to Anthony of RM8,000 each per month. The business also hiring a disabled cashier and being paid for RM1,500 per month

b. Bonus was paid for two months for all staff inclusive Anthony at RM16,000

c. EPF was paid for all staff including Anthony at 9%.

2. Travelling allowance was incurred 50% for business purposes and another 50% for Anthonys use.
3. Entertainment allowance was for staff family day
4. The cost of new coffee machine is subject to depreciation at 14% which is yet recorded.
5. The miscellaneous expenses were incurred 80% on business purpose whereas another 20% is for donation made by the business.

Other information:

Anthony brought in into their business his own car which had been acquired in year 2018 at the cost of RM85,000. The market value of the car in year 2020 is recorded at RM50,000. The van is to be used for delivery purpose due to MCO of the restaurant.

Apart of business, he was actively in various platform to generate additional income. As at 2021, Anthony earns the following incomes:

1. Rental income of RM48,000 from his apartment at Kuala Lumpur. He also incurred RM600 for the quit rent and assessment; RM4,200 for the maintenance; and RM6,000 for some renovation on the kitchen area.
2. 10% dividend from his investment in Kenanga Bhd. His shareholding amounted RM200,000.
3. RM36,000 interest income from his investment in unit trust with Philips Mutual (approved).
4. Part-time car dealert and he earned RM21,000 in the year 2021.

Anthony is married to Lisa. The are having a pair of twins aged 12 years old and a baby of 10- month young. . Anthony also taking care of his father, aged 65 years old and suffered with kidney problem. Due to that, Anthony spent an amount of RM500 per month for his father medication. Lisa is a freelance business consultant. Lisas earned an amount of RM145,000 in the year 2021 from her job.

In the year 2021, Anthony and Lisa incurred the following expenses:

Anthony

Lisa

Purchase of two tablets amounting to RM2,000 for the use of his kids online classes Reading materials of RM3,100 for his family RM6,000 each for the twins, deposited to National Education Saving Scheme (SSPN). Life insurance premium for him and her wife amounted to RM4,800. Medical insurance for Anthony and Lisa at RM1,500 each, and another RM1,500 for his children. Personal donation of RM1,000 to Tabung Prihatin (approved).

RM2,200 for the purchase of breastfeeding equipments. Kindergarten fees for the baby amounted to RM6,000 Purchase of new laptop for RM4,400. Education insurance for her children totaling RM3,600. Contribution to private retirement scheme at 5% from her income. RM6,200 for the medical expenses for her parents Deposit to SSPN for the baby at an amount of RM100 per month. Donation to Rumah Amal (approved ) for RM2,000.

Required:

1. Prepare the Statement of Profit or Loss for the year ended 31 December 2021 for the business.

Show all workings

2. Determine the statutory business income for the year of assessment 2021.
3. Compute the income tax payable for Anthony and Lisa under separate assessment. Anthony claim all the child reliefs
4. Recommend any tax planning to Anthony and Lisa to minimize the tax liability.

Thank you.