Timba Sdn. Bhd. ends it accounting period on 31 October annually. It is involving in the...

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Timba Sdn. Bhd. ends it accounting period on 31 October annually. It is involving in the timber extraction business after getting a license to commence its operation. The following expenditure incurred by the company: Date 2 March 2017 15 April 2017 6 Nov 2017 4 May 2018 Expenditure Construction of a road Purchase of plant and machinery Construction of labor quarter Construction of an office building RM 56,000 102,000 87,000 98,000 On 26 February 2020, Timba Sdn. Bhd. ceased its operation and sold off all the assets except office building to Neo Sdn. Bhd. for RM400,000. Required: Calculate the forest allowance and forest charge (if any) due to Timba Sdn. Bhd. for the relevant years of assessment under each of the following circumstances. The company did not make an election under Paragraph 32 (1) Schedule 3 of the Income Tax Act 1967 (as amended). (10 marks) APPENDIX TAX RATES AND ALLOWANCES i) Tax rates of resident company with paid up capital not more than RM2.5 million Chargeable income On first RM600,000 Excess RM600,000 ii) All chargeable income Tax rates of resident company with paid up capital more than RM2.5 million and non-resident company iii) Type of assets Capital allowances Office equipment, furniture and fittings Plant and machinery - general Plant and machinery (heavy) and motor vehicle Industrial building Initial Allowance (%) Rate 20 20 20 10 17% 24% 24% Annual Allowance (%) 10 14 20 3 iv) Agriculture and forest allowance Capital expenditure - Agriculture (a) Clearing and preparation of land for the purposes of agriculture (b) Planting of crops on land cleared for planting (c) Construction on a farm of roads or bridges (d) Construction on a farm of a building used for the welfare of persons or as living accommodation for a person employed for the working of a farm (e) Any other building Rate of allowance (%) 50 50 50 20 10 Capital expenditure-Forest (a) Construction of roads or buildings used for the purposes of extracting timber from a forest (b) Expenditure incurred on buildings used for the welfare of persons or as living accommodation for a person employed in or in connection with the extraction of timber from a forest. 10 20 Timba Sdn. Bhd. ends it accounting period on 31 October annually. It is involving in the timber extraction business after getting a license to commence its operation. The following expenditure incurred by the company: Date 2 March 2017 15 April 2017 6 Nov 2017 4 May 2018 Expenditure Construction of a road Purchase of plant and machinery Construction of labor quarter Construction of an office building RM 56,000 102,000 87,000 98,000 On 26 February 2020, Timba Sdn. Bhd. ceased its operation and sold off all the assets except office building to Neo Sdn. Bhd. for RM400,000. Required: Calculate the forest allowance and forest charge (if any) due to Timba Sdn. Bhd. for the relevant years of assessment under each of the following circumstances. The company did not make an election under Paragraph 32 (1) Schedule 3 of the Income Tax Act 1967 (as amended). (10 marks) APPENDIX TAX RATES AND ALLOWANCES i) Tax rates of resident company with paid up capital not more than RM2.5 million Chargeable income On first RM600,000 Excess RM600,000 ii) All chargeable income Tax rates of resident company with paid up capital more than RM2.5 million and non-resident company iii) Type of assets Capital allowances Office equipment, furniture and fittings Plant and machinery - general Plant and machinery (heavy) and motor vehicle Industrial building Initial Allowance (%) Rate 20 20 20 10 17% 24% 24% Annual Allowance (%) 10 14 20 3 iv) Agriculture and forest allowance Capital expenditure - Agriculture (a) Clearing and preparation of land for the purposes of agriculture (b) Planting of crops on land cleared for planting (c) Construction on a farm of roads or bridges (d) Construction on a farm of a building used for the welfare of persons or as living accommodation for a person employed for the working of a farm (e) Any other building Rate of allowance (%) 50 50 50 20 10 Capital expenditure-Forest (a) Construction of roads or buildings used for the purposes of extracting timber from a forest (b) Expenditure incurred on buildings used for the welfare of persons or as living accommodation for a person employed in or in connection with the extraction of timber from a forest. 10 20