Tenfeet Sdn Bhd. a company with a paid-up ordinary share capital of RM2 million, is in the business of shoe making. The companys profit or loss account for the year ended 30 April is as follows:

	RM'000	RM'000
Sales		9,744
Less: Cost of sales		3,224
		6,520
Add: Gain on sales of machinery		15
Fixed deposit interest		30
		6,565
Less:
Staff remuneration	2,895
Repairs and maintenance	288
Lease rentals	168
Insurance premiums	31
Retirement gratuities	420
Foreign Exchange (net)	430
Donations	204
Financial expenses	213
Legal fees on the purchases of a storage building	13
Depreciation	94	4,756
Profit before taxation		1,809

Notes:

1. Sales includes RM3,000 for late-payment interest received from trade debtors.
2. Cost of sales includes a sum of RM274,000 paid to a distributor to terminate his contract, which had become onerous.

Fixed deposit interest is in respect of fixed deposit pledged with a local bank for banking facilities.

3. Staff remunerations includes:

1. Entertainment allowance amounting to RM200,000 paid to marketing personnel to enable them to entertain the companys clients.
2. Employees Provident Fund Contributions:

The rate of contributions for senior management staff is 21% in respect of total remunerations of RM300,000. For marketing personnel, the rate of contributions is 12%.

3. The conduct of the marketing executive was detrimental to business of the company. The company therefore required him to retire and agreed to pay him compensation of RM120,000 in two annual instalments of RM60,000 each. Only the first installment paid in February 2019 was included in the profit and loss account of Tenfeet.

4. Repairs and maintenance includes a sum of RM66,000 incurred on repairs to the storage building purchased in December 2018 for the storage of raw material. These extensive repairs were carried out immediately after the purchases.
5. TSB leased three motor cars for its executives. The first lease commenced in February 2018 at RM5,000 per month, the second commenced in August 2018 also RM5,000 per month and the third leased commenced in October 2018 at RM9,000 per month. Cost of motor car leased are:

Lease Cost of car

RM

First 165,000

Second 145,000

Third 250,000

6. Insurance premiums include export credit insurance premiums of RM22,000 paid to an insurance company approved by Minister (Malaysia Export Credit Insurance Berhad).
7. Retirement gratuities include a provision of RM27,000
8. The foreign exchange loss (net) comprise the following:

RM

Realised loss (on settlements of amounts due for stocks acquired) 192,000

Realised loss (repayment of loan) 240,000

Unrealised loss (on settlement of trade debts) 120,000

Unrealised gain (on amounts due for purchased of stock) (122,000)

430,000

RM

Cash donation to temples 180,000