QUESTION 1
A.
Hooda Sdn Bhd was incorporated in March 2001 and commenced the business of
manufacturing household goods from recycled rubber and plastic materials. The company
closes its accounts to 31 December annually. As at 1 January 2022, the company has a
paid-up capital of RM3 million with eighty one percent shares held by Malaysian citizens.
The Statement of Profit or Loss for the year ended 31 December 2022 is appended below:
Notes
Sales
Less:
Add:
Less:
RM
Cost of sales
Others income
Dividend income
Interest income
Insurance compensation
Expenses
Remuneration
Entertainment
Interest
Donation
Foreign exchange loss
Advertisement, and publicity
Insurance
Professional fees
Profit before tax
1
2
3
85,000
63,000
51,000
4
5
6
7
8
9
10
11
800,000
280,000
180,000
165,000
72,700
222,000
40,000
101,000
RM
2,920,000
705,000
2,215,000
199,000
2,414,000
1,860,700
553,300
Notes:
1.
Dividend income
The dividend income was received on 29 April 2022 from investment in a local company
listed on Bursa Malaysia.
2.
Interest income
The interest income was received from trade customers who settled their outstanding debts
after the credit term period.
3.
Insurance compensation
The company received an insurance compensation of RM51,000 due to destroyed raw
materials during a flash flood at the factory.
4.
The remuneration includes the amount paid to employees and a managing director. The
remuneration package for the managing director of the company was as follows:
RM
Salary
240,000
EPF contribution
45,000
An oversea leave passage
27,000
5.
Entertainment
RM
100,000
70,000
60,000
50,000
Entertainment of suppliers
Lunch with potential customers
Annual dinner for the employees and their family
Free gifts to customers purchasing the company’s products during festive
occasions
6.
Interest
RM
85,000
95,000
Interest on loan taken for an investment in a company in Vietnam
Interest on loan taken for financing the company’s working capital
7.
Donation
Cash donation to the Federal Government in May 2022
Cash donation to the Public Library under S44(8)
8.
RM
125,000
40,000
Foreign exchange loss
Realized loss on the export of trading stock
Realized loss on import of machinery spare parts
Unrealised loss on the import of a production machine
9.
RM
11,000
17,800
43,900
Advertisement and publicity
RM
Advertising the company’s products in local dailies
95,000
Promoting the company’s brand name by sponsoring an approved 127,000
international event held in Putrajaya, Malaysia
10.
Insurance
RM
Premium paid for the import of cargo insured with a local insurance company 13,000
Premium paid for insuring the company’s assets
27,000
11.
Professional fees
In January 2022, the company had entered into a contract with four companies to sell
their products at an agreed price. However, the company had breached the contract
by selling the products at a price lower than the agreed price. Due to this, the four
companies filed a civil suit for compensation on the damages. Consequently, the
company paid RM60,000 for compensation to the companies concerned. The legal
fee incurred to defend the case was RM11,000. Both expenses were charged in the
accounts.
Other details of the professional fees incurred during the year are as follows:
Secretarial fees
Income tax filing fees
SST appeal
RM
10,000
15,000
5,000
12.
Other information:
i.
The capital allowances for the year of assessment 2022 were RM45,600.
ii.
There was unutilized capital allowances and adjusted loss brought forward from
the previous year amounting to RM21,500 and RM37,300, respectively.
iii.
The chargeable income reported for year of assessment 2021 was RM530,000.
Required:
Compute the income tax payable by Hooda Sdn Bhd for the year of assessment
2022. Every item in the notes to the account must be shown in your computation.
Write ‘NIL’ where no adjustment is necessary.
(20 marks)
B.
Targetmax Sdn Bhd trades kitchen appliances in Johor Bharu. The company closes
its accounts on 31 October annually. The estimated tax payable submitted via Form
CP204 for the year assessment 2022 was RM480,000.
Required:
a.
Identify the due date and amount to be paid by Targetmax Sdn Bhd for the
submission of its first monthly tax instalment for the year of assessment 2022.
(2 marks)
b.
Discuss briefly the procedure to revise the estimated tax payable for
Targetmax Sdn Bhd.
(3 marks)
(Total: 25 marks)
END OF QUESTIONS