Professional Documents
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W13 Corporate Tax
W13 Corporate Tax
Appropriate Products Sdn Bhd manufactures stationary and is also an investment holding company. The
company's factory building is located in Bangi Selangor. The company prepares its accounts to
December 31 annually. The company's profit and loss account ended December 31 2020 is as follows:
Administrative expenses:
Salaries and allowances 2640
Depreciation 110
Professional fees 6 135
Miscellaneous expenses 7 385 3270
Financial expenses:
Foreign exchange loss 8 70
Interest expense 9 240 310
Notes
1
• Payment for the use of services of an approved research and development company
RM65000
• Market research expenses amounting to RM70000
2. Closing stock is arrived at after deduction of allowances for stock obsolescence at 10% of the year end
stock balance.
RM'000
Staff annual dinner 126
Client entertainment (entertain customers and dealers) 334
Cash donations to approved institutions 50
Participation in approved overseas trade fairs 48
Annual subscriptions paid to trade associations 20
Donation of food hampers to approved institutions 152
730
4. Travelling expenses include lease rental payments for the company's motor vehicles as follows:
5. Remuneration includes:
RM'000
Gratuity paid to executive who retired at the age of 55 65
Staff entertainment allowances for purposes of defraying entertainment expenses 120
on clients
RM'000
Audit fees 15
Tax compliance fees 5
Trademark registration 21
Legal fees incurred in obtaining overdraft facilities 24
Fees paid to Good Search Inc , a company in America for conducting a feasibility 70
study relating to setting up a marketing office in America (withholding tax has
been paid)
135
2
7. Included in miscellaneous expenses is an amount of RM80,000 being the corporate membership
entrance fees paid to a golf club.
RM'000
Loss rising from translation of overseas trade debts at financial year end 10
Loss on payment relating to the purchase of raw materials 60
70
RM'000
Interest subsidy pad by the company to a local bank in respect of housing loans 87
taken by employees
Interest payment to a supplier for late settlement of trade debts 46
10. The dividend income of RM50,000 represents tax exempt dividends received from quoted shares.
RM'000
Interest received from trade debts on late payment of debts 15
Interest accrued on fixed deposits at June 30, 2020 received on August 15, 2020 25
40
b) On August 1, 2020 the company paid RM120000 in cash for the purchase of a car for the use of its
directors.
3
c) On September 1, 2020 the company disposed of a lorry costing RM150000 which it acquired on June
12, 2001 for a sale of consideration of RM40000.
d) The company has unabsorbed business losses brought forward from the year of assessment 2019 of
RM399000.
Required
a. Compute the chargeable income of Appropriate Products Sdn Bhd for the year of assessment 2020.
(40 marks)