MAC Sdn Bhd (MAC) carries on the business of manufacturing rubber gloves and sells them to the
Question:
MAC Sdn Bhd (MAC) carries on the business of manufacturing rubber gloves and sells them to the local customers as well as overseas. MAC also owns another business, a guesthouse. During the year, MAC paid RM600,000 to purchase raw materials, RM120,000 as damages to one of its customers who sued for late delivery of the rubber gloves by MAC, RM54,000 as damages to account for injuries suffered by a guest who was injured when the guesthouse was flooded, RM240,000 as contributions in respect of its employees to a EPF, RM1,200,000 as total remunerations to its employees. RM66,000 as commissions, without making any deduction for withholding tax to GHL Pte Ltd, a company resident in the UK, in consideration of GHL Pte Ltd introducing new customers to MAC. MAC also incurred RM15,000 and RM20,000 on the maintenance and upgrading the toilet respectively. MAC paid RM6,000 to purchase supporting equipment for disable employee who works on the factory.
- State with reasons whether the above outgoing expenses are deductible for tax purpose?
- How much MAC Sdn Bhd are eligible to claim for deductible expenses for tax computation?
Accounting concepts and applications
ISBN: 978-0538745482
11th Edition
Authors: Albrecht Stice, Stice Swain