Tutorial 1: 1. Included in The Cost of Sales Are
Tutorial 1: 1. Included in The Cost of Sales Are
Tutorial 1: 1. Included in The Cost of Sales Are
Carriage Sdn Bhd was incorporated on 1 October 2017. The company commenced
business on 1 February 2018 and made up its first set of accounts to 31 December 2018.
Its principal activities are manufacturing of motor vehicle spare parts and investment
holding.
The company’s profit and loss account for the year ended 31 December 2018 is as
follows:
sales are:
a. Depreciation of fixed assets amounting to RM120,000 b. Allowances for
stock obsolescence amounting to RM26,000 c. Royalty payment of 1% of
sales to a Taiwanese company for the right to use its
trademark. The accountant advised that the relevant withholding tax has not
been paid to the IRB.
7. Repairs and maintenance includes furniture and fittings costing RM10,000. It is the
company’s
policy to charge to the profit and loss accounting expenditure incurred on fixed assets
costing less than RM1,000 each.
13. Other income comprises of profit from disposal of quoted shares RM43,000, tax
exempt
dividend RM7,000 and dividend income received from ABC Sdn Bhd
RM10,000.
14. The qualifying expenditure and the rates of annual allowances for assets qualifying
for capital
allowances for year of assessment 2018 are as
follows:
Qualifying expenditure Rate
RM’000 % Factory building
1,200 3 Plant and machinery 2,000 20 Office equipment 80 10 Furniture and
fittings 40 10
b. Starting from net loss before taxation, compute the chargeable income of Carriage
Sdn Bhd
for year of assessment 2018 showing all the relevant tax adjustments. Explain your
answer