Gagah Sdn. Bhd. (Gagah) was incorporated on 1 January 2020 with an authorised and issued share...

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Gagah Sdn. Bhd. (Gagah) was incorporated on 1 January 2020 with an authorised and issued share capital of RM 1 milion. The company trades consumer goods and has a financial year end of 31 December. It began operations on 1 April 2020. The statement of profit or loss for Gagah for the financial year ended 31 December 2020 is given as follows: Note RM RM 200,000 (105,000) 95,000 Revenue Les: Cost of sales 1 Gross profit Less: Expenses Entertainment expenses Pre-commencement expenses Salaries and wages Foreign exchange loss Provision for doubtful debts Penalty Profit before tax 16,500 11,500 23,000 5,800 8,600 3,700 (69,100) 25,900 Notes: 1. Cost of sales includes depreciation of equipment of RM 5,000. 2. Entertainment expenses include food and drinks for new product launch RM 4,000, promotional samples of RM 4,500 and entertaining clients at restaurants for RM 8,000. The clients were entertained with the presence of Gagah's employees. 3. The pre-commencement expenses incurred up to 31 March 2020 comprised of: Salaries and employees' provident fund (EPF) related expenses RM 10,500 Incorporation expenses (registration of company) RM1,000 4. Salaries and wages include: Salaries of directors RM 20,000 EPF for directors RM 3,000 5. The foreign exchange loss is in regards to losses realised on trade payables. 6. The provisions are made up of general provisions for trade debtors RM 4,000 and specific provisions for trade debtors RM 4,600. 7. The penalty is made up of a fine for not adhering to local council's regulations RM 1,700 and a fine by the Inland Revenue of RM 2,000. Required: Compute the chargeable income for Gagah Sdn Bhd for the YA 2020. 2345 67 Gagah Sdn. Bhd. (Gagah) was incorporated on 1 January 2020 with an authorised and issued share capital of RM 1 milion. The company trades consumer goods and has a financial year end of 31 December. It began operations on 1 April 2020. The statement of profit or loss for Gagah for the financial year ended 31 December 2020 is given as follows: Note RM RM 200,000 (105,000) 95,000 Revenue Les: Cost of sales 1 Gross profit Less: Expenses Entertainment expenses Pre-commencement expenses Salaries and wages Foreign exchange loss Provision for doubtful debts Penalty Profit before tax 16,500 11,500 23,000 5,800 8,600 3,700 (69,100) 25,900 Notes: 1. Cost of sales includes depreciation of equipment of RM 5,000. 2. Entertainment expenses include food and drinks for new product launch RM 4,000, promotional samples of RM 4,500 and entertaining clients at restaurants for RM 8,000. The clients were entertained with the presence of Gagah's employees. 3. The pre-commencement expenses incurred up to 31 March 2020 comprised of: Salaries and employees' provident fund (EPF) related expenses RM 10,500 Incorporation expenses (registration of company) RM1,000 4. Salaries and wages include: Salaries of directors RM 20,000 EPF for directors RM 3,000 5. The foreign exchange loss is in regards to losses realised on trade payables. 6. The provisions are made up of general provisions for trade debtors RM 4,000 and specific provisions for trade debtors RM 4,600. 7. The penalty is made up of a fine for not adhering to local council's regulations RM 1,700 and a fine by the Inland Revenue of RM 2,000. Required: Compute the chargeable income for Gagah Sdn Bhd for the YA 2020. 2345 67

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Computation of Income for Gagah Sdn for the year 2020 Note RM RM Revenue 200000 Less Cost of Sales 1 ... View the full answer