Gold Coin Sdn Bhd was incorporated in March 2013 and commenced business of manufacturing air conditioner spare parts. It closes its accounts on 31 December every year and given below the Statement of Comprehensive Income for gold coin Raya for the year ending 31 December 2020.

Notes:

Other income consists of:

• RM30,000 single tier dividend received from a Malaysian resident company

·  A sum of 64,000 was refunded by a student during the year who was sponsored by the company but dropped out.

• RM14,000 received from a fixed deposit placed with a local bank
• An insurance recovery of RM34,000 in respect of some goods stolen from the· warehouse.

2.  Salaries and wages include:  

• The managing director, responsible for the company’s expansion in overseas market, has been with the company for five years. Details of his remuneration and other perks are as follows:

• The company employs a disabled employee whose annual salary is RM88,000

3. Loan Interest:

• The company obtained a bank loan in early part of the financial year. Funds not immediately utilized were invested in the share market. During the year, the carry accumulated   interest on the loan used for that investment was RM30,000 while another RM104,000 was attributable to funds utilized for working capital.

4.   Entertainment expenditure consists of:

• RM30,000 on company’s Family Day Annual Dinner for its staff and their family; and

•   RM200,000 disbursement to the sales staff to entertain the company’s clients.

5.  Repairs and maintenance includes:

• The construction of an office room and a bathroom at a cost of RM38,000 to accommodate the special needs of the disabled employee.
•   The company’s metal perimeter fence (surrounding the factory) became rusty and was not economical to repair and repaint. It was replaced at a cost of RM112,000

6.    Bad and doubtful debts consists of:  

• A general provision of RM380,000 and a specific provision of RM192,000.

              ·  A sum of RM32,000 advanced to three marketing staff against his commission earnings was written after all three died in an accident.  

• A sum of RM56,000 advanced to the supplier who had cash flow problems was also written off upon his death.

7.     Motor vehicle expenses consists of:  

• RM12,000 relates to traffic offences, mostly parking and speeding summons, incurred by the company drivers.  
• RM96,000 was on repairs and maintenance.

9.   Advertisement and publicity consists of:

• RM2,020,000 was incurred to promote the company’s products at public motoring

           events.

• RM680,000 was advertising cost in local dailies, magazines, and radio stations.

• RM304,000 was advertising cost of the company’s Malaysian Branded Goods on

          the local television networks.

Other information:

-  Capital allowance of RM608,000 on its assets currently used in the business during the year and Gold Coin have balancing charge amounting to RM30,000 (Not including next information)

-   A new asset bought for the business in September 2020 through hire purchase amounting to RM120,000 with deposit 20,000 paid in September. Instalment for the assets begins on 1 October 2020 for 20 months. (IA, 20%; AA, 20%)

-  An asset bought in 2017 for RM210,000 disposed in May 2020 for 80,000 (this transaction was omitted from Income Statement) (IA, 20%; AA, 20%)

Required:

Based on the information above, compute chargeable income of Gold Coin Sdn Bhd for year of assessment 2020.

Answer rating: 100% (QA)

Chargeable income of Gold Coin Sd... View the full answer