You are the tax agent of Pat Poh Sdn Bhd. Pat Poh is in the business of manufacturing electronic bidets and prepares its accounts annually to 31 December. In 2014, the company constructed a factory building in Subang Jaya and commenced using it in its business operations.

Pat Poh incurred the following expenditure on the factory in the basis period for the year of assessment 2014:

Cost of land	RM1,000,000
Construction cost and related expenditure for the building	RM4,000,000

The total area of the factory building is 100,000 square feet, of which the total office area is 20,000 square feet.

Pat Poh intends to move its manufacturing operations to a brand new state-of-the-art building in Batu Kawan in the year 2016. Immediately thereafter, it plans to dispose of the Subang Jaya factory building.

Details of the expected proceeds from the impending disposal of the Selangor factory are as follows:

LAND	RM2,000,000
FACTORY BUILDING	RM6,000,000
TOTAL	RM8,000,000

Required: a) In respect of Pat Poh Sdn Bhds Subang Jaya factory building:

i. determine the qualifying building expenditure;[3 marks]

ii. compute the industrial building allowances and residual expenditure for the years of assessment 2014 and 2015; and [5 marks]

iii. compute the balancing charge or balancing allowance in respect of its disposal during the year of assessment 2016. [5 marks]

b) The management of Pah Poh are curious about what Income Tax (Accelerated Capital Allowance) (Plant and Machinery) Rules 2009 is all about.

Explain in a management letter which tells the management what is Accelerated Capital Allowance is all about, the parties that are eligible for this special allowance, and from when this special allowance is in effect. [17 marks]