3. You are the tax advisor for TOM Sdn Bhd (TOM). The company was incorporated on...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
3. You are the tax advisor for TOM Sdn Bhd (TOM). The company was incorporated on 1 October 2019 to carry on the business of operating a papaya (non-promoted product) farm in Semenyih, Selangor. The company makes up its account to 30 November annually. Its first financial year ended 30 November 2020 and the various expenses incurred were: Expenditure Purchase of land Clearing of land Construction of roads Amount (MYR) 280,000 35,000 59,000 27,000 Date 1 October 2019 15 November 2019 30 November 2019 Construction of bridge Purchase of machinery Construction of labour quarters 5 March 2020 14 April 2020 22 June 2020 Note 1 36,000 14,000 19,000 48,000 6,500 12 November 2020 Construction of warehouse 16 December 2020 25 February 2021 13 March 2021 Construction of administrative office Seedlings (Note 2) Research collaboration costs (Note 3) Note: 1. The machinery was purchased from LLN Pte Ltd (LLN), a Singapore resident company for MYR28,000. TOM incurred MYR500 and MYR1,200 for the delivery and the related insurance cost. In addition, TOM paid LLN for the provision of an employee for 10 days at MYR2,500 to install the machinery. The airfare (MYR1,100) and the accommodation cost (MYR2,000) of the employee are borne by TOM. 2. TOM employed a new planting technology developed by a Taiwanese company, GD Pte Ltd, in which TOM incurred a royalty of MYR16,000, besides the seedling cost above (MYR48,000). 3. Payment of MYR6,500 made to the University of Heriott-Watt, Putrajaya, a branch campus of the University, resident in United Kingdom, for a joint research collaboration project on evaluating new nutritional benefit of papaya. Required: (a) Determine the basis period for the first year of assessment of TOM. (b) Regarding the expenditure listed in the above table, calculate the agriculture allowance and capital allowance on plant and machinery that TOM can claim in the first year of assessment. Note: Every item of expenditure must be listed in your computation irrespective of whether or not it is claimable. Where the item is not claimable, indicate 'NIL' with appropriate justification. (c) Discuss the withholding tax implications on TOM, if relevant, for information given in Note 1 to 3 respectively as abovementioned. 3. You are the tax advisor for TOM Sdn Bhd (TOM). The company was incorporated on 1 October 2019 to carry on the business of operating a papaya (non-promoted product) farm in Semenyih, Selangor. The company makes up its account to 30 November annually. Its first financial year ended 30 November 2020 and the various expenses incurred were: Expenditure Purchase of land Clearing of land Construction of roads Amount (MYR) 280,000 35,000 59,000 27,000 Date 1 October 2019 15 November 2019 30 November 2019 Construction of bridge Purchase of machinery Construction of labour quarters 5 March 2020 14 April 2020 22 June 2020 Note 1 36,000 14,000 19,000 48,000 6,500 12 November 2020 Construction of warehouse 16 December 2020 25 February 2021 13 March 2021 Construction of administrative office Seedlings (Note 2) Research collaboration costs (Note 3) Note: 1. The machinery was purchased from LLN Pte Ltd (LLN), a Singapore resident company for MYR28,000. TOM incurred MYR500 and MYR1,200 for the delivery and the related insurance cost. In addition, TOM paid LLN for the provision of an employee for 10 days at MYR2,500 to install the machinery. The airfare (MYR1,100) and the accommodation cost (MYR2,000) of the employee are borne by TOM. 2. TOM employed a new planting technology developed by a Taiwanese company, GD Pte Ltd, in which TOM incurred a royalty of MYR16,000, besides the seedling cost above (MYR48,000). 3. Payment of MYR6,500 made to the University of Heriott-Watt, Putrajaya, a branch campus of the University, resident in United Kingdom, for a joint research collaboration project on evaluating new nutritional benefit of papaya. Required: (a) Determine the basis period for the first year of assessment of TOM. (b) Regarding the expenditure listed in the above table, calculate the agriculture allowance and capital allowance on plant and machinery that TOM can claim in the first year of assessment. Note: Every item of expenditure must be listed in your computation irrespective of whether or not it is claimable. Where the item is not claimable, indicate 'NIL' with appropriate justification. (c) Discuss the withholding tax implications on TOM, if relevant, for information given in Note 1 to 3 respectively as abovementioned.
Expert Answer:
Answer rating: 100% (QA)
a Determine the basis period for the first year of assessment of TOM The basis period for the first year of assessment of TOM is the calendar year 202... View the full answer
Related Book For
Introduction to Management Accounting
ISBN: 978-0133058789
16th edition
Authors: Charles Horngren, Gary Sundem, Jeff Schatzberg, Dave Burgsta
Posted Date:
Students also viewed these accounting questions
-
The Sibelius Company was incorporated on 1 March X1. It carries a commercial activity. The following transactions were undertaken during the first month of operation of Sibelius Co. 1 March 1...
-
The Bekele Company was incorporated on April 1, 20X0. Bekele had 10 holders of common stock. Rosa Bekele, the president and chief executive officer, held 51% of the shares. The company rented space...
-
The Montha Company was incorporated on April 1, 20X1. Montha had 10 holders of common stock. Chenda Montha, who was the president and CEO, held 51% of the shares. The company rented space in chain...
-
GoFast Corp. wishes to renovate the property so that he can sell it at a higher price.The after-tax cash flow over next year up to RM320,000 if the property was renovated.The renovation cost is...
-
Under what circumstances would a person raise a claim of non est factum? What restrictions are there on its availability?
-
A major airport has been redesigned, with the goal of reducing flight delays. The delays (in minutes) for random samples of flights before and after the upgrade are available in MyStatLab. Create...
-
Reconsider Parts (a) through (f) of Problem 2. For each "true" statement, develop a mathematical proof based on the time value of money factor equations from Table 2.6 in Chapter 2. Data from problem...
-
The City of Grinders Switch maintains its books so as to prepare fund accounting statements and records worksheet adjustments in order to prepare government-wide statements. You are to prepare, in...
-
a) Simplify the expression. Express your answer with positive exponents. (4x6) (4) (2x)* (123) 2 b) In 2004, a sum of $1900 is invested at a rate of 3.75% per year (compound interest) for 12 years....
-
The following is Edge Sports Repair Shop's trial balance at September 30, 2014, the company's fiscal year end: Additional information: 1. Service revenue earned but not recorded at September 30,...
-
Full soft, Inc. is a large software development company based in New York City. Full soft's software product development code is kept confidential in an effort to safeguard the company's competitive...
-
Define and develop elements of a contract and determine whether a duly formed contract is enforceable under the common law or Uniform Commercial Code.?
-
DESCRIBE: Think about the key factors that caused problems at Wells Fargo. Describe at least two key factors. Make sure to elaborate on each factor. CONNECT: Make a connection between the problems...
-
Your IT team has been asked to access the risks of an application server upgrade project. Discuss the common sources of risk for this IT project and give suggestions for managing them. Explain why...
-
Many companies are addressing the needs of employees to balance work life and family life by offering a flexible schedule, job sharing, etc. What is the upside and downside for a company that offers...
-
Do you have design problems you need to tackle? Explain. A design problem are problems with no one ideal solution (in contrast to an engineering problem that would have one ideal solution) Do you...
-
Cup Movement (cm) 60 50 40 30 20 10 17 Condition 1 (15 cm) Rubber Band Stretch and Cup Movement 26 Condition 2 (30 cm) Rubber Band Stretch 53 Condition 3 (45 cm) 1. Do you see a trend in the points...
-
Difference between truncate & delete
-
Fill in the blanks for each of the following independentcases: Total Margin S750,000 Selling Variable Price per Cost per Total Units Contribution Total Fixed Net Income Case Unit $26 10 21 30 Unit...
-
Define a cost management system and give its three purposes.
-
American Sports, an outdoor sports retailer, is planning to add a Web site for online sales. The estimated costs of two alternative approaches are as follows: At the expected level of orders, which...
-
Online electronics retailer Kogan has announced an initial public offering to raise $50 million, with plans to list on the ASX at the end of June. Kogan, founded in 2006, said it would have a market...
-
For each company below, fill in the missing data. Each company is independent. Sales Beginning finished goods Cost of goods manufactured Ending finished goods Cost of sales Income Statement Company X...
-
Innovative Computers Pty Ltd began manufacturing inexpensive computers for the student market on 1 July 2018. The variable costs of manufacturing each computer are as follows. During the year ended...
Study smarter with the SolutionInn App