question 6 b) Labu Labi Sdn Bhd closes its accounts annually on 31 December. On 3 May 2022, the company disposed of a company car for RM60,000. The company acquired the car on a hire purchase basis on 1 July 2020 for RM200,000 for use by the managing director. The residual expenditure brought forward at 1 January 2022 was RM10,000. Required: b) Calculate the balancing adjustment which arises for Labu Labi Sdn Bhd on the disposal of the car on 3 May 2022 for the year of assessment 2022. c) Not all “factories” are considered as industrial buildings in tax law. Explain.

question 6 b) Labu Labi Sdn Bhd closes its accounts annually on 31 December. On 3 May 2022, the company disposed of a company car for RM60,000. The company acquired the car on a hire purchase basis on 1 July 2020 for RM200,000 for use by the managing director. The residual expenditure brought forward at 1 January 2022 was RM10,000. Required: b) Calculate the balancing adjustment which arises for Labu Labi Sdn Bhd on the disposal of the car on 3 May 2022 for the year of assessment 2022. c) Not all “factories” are considered as industrial buildings in tax law. Explain.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter7: Operating Assets

Section: Chapter Questions

Problem 6MCQ: Refer to the information for Cox Inc. above. What amount would Cox record as depreciation expense...

See similar textbooks

Similar questions

An assert was purchased on 1st July 2017 for a cash price of MYR 205,000. It is a policy of the business to depreciate its asset using the reducing balance method at the rate of 15% per annum on a yearly basis. Calculate the asset’s net book value on 31st December 2019, assuming that the business closes its account on that date. Select one: a. MYR 174,250 b. MYR 125,895.63 c. MYR 137,004.06 d. MYR 125,960.50
A vehicle which cost R100 000 and on which the accumulated depreciation is R60 000 on 31 December 2020 (year end) is sold on the 31st March 2021 for R45 000 to Mr Hamilton. It was agreed that he would pay 50% in cash and the balance on the 30th June 2021. Depreciation is written off at 20% per annum using the diminishing balance method. The entity is not registered for VAT. Required: Prepare all the journal entries to record the disposal of the vehicle on the 31st March 2021. Journal narrations are required. Document numbers are not required.
A vehicle which cost R100 000 and on which the accumulated depreciation is R60 000 on 31 December 2020 (Year-end) is sold on the 31 March 2021 for R45 000 to Mr Hamilton. It was agreed that he would pay 50% in cash and the balance on the 30 June 2021. Depreciation is written off at 20% per annum using the diminishing balance method. The entity is not registered for VAT. Required: Prepare all the journal entries to record the disposal of the vehicle on 31 March 2021. Journal narrations are required. Document numbers are not required.
A Ltd buys a machine on 1 June 19.1 the cost price of which is R1 000 000. A Ltd provides for depreciation on machinery at 20% per annum according to the straight-line method. The SA Revenue Service allows a wear-and-tear allowance of 25% per annum according to the straight-line method. The year-end of A Ltd is 31 May. Assume a taxation rate of 40%. Assume that A Ltd maintains a profit before provision for depreciation of R500 000 each year. Identify the current tax for the year ended 31 May 19.2. Select one: a. R180 000 b. R20 000 c. R100 000 d. R120 000
Prepare journal entries to record the following transactions. You are required to show all calculations: the financial year-end of the client is 30 November 2021. 3.1 The company adopted the straight-line depreciation method. Record the 15% depreciation on the plant and equipment purchased On 1 December 2020 for R125 000. 3.2 The allowance for credit losses account has an opening balance of R4 500. The policy requires the allowance to equate 8% of the total accounts receivable. The debtors sub-ledger totaled R52 000 prior receiving 40c in the rand on an account of R3 000. The financial manager instructed the write off on the balance WITH GENERAL LEDGER ENTERIES: Please dont provide answer in image format thnku
A Ltd buys a machine on 1 June 19.1 the cost price of which is R1 000 000. A Ltd provides for depreciation on machinery at 20% per annum according to the straight-line method. The SA Revenue Service allows a wear-and-tear allowance of 25% per annum according to the straight-line method. The year-end of A Ltd is 31 May. Assume a taxation rate of 40%. Assume that A Ltd maintains a profit before provision for depreciation of R500 000 each year. Identify the amount for accounting profit before tax, after depreciation provision for the year ended 31 May 19.2.
Zone Sdn. Bhd. (accounting year ended 30 November), bought Furniture and Fittings on 1st June 2022 for RM10,000. Compute the residual expenditure for the assets for the year of assessment 2022 (Rates for the AA is at 10%). Select one: a. RM3,000 b. RM4,000 c. RM6,000 d. RM7,000 e. Tiada jawapan di atas/ None of the answer above
Ltd buys a machine on 1 June 19.1 the cost price of which is R1 000 000. A Ltd provides for depreciation on machinery at 20% per annum according to the straight-line method. The SA Revenue Service allows a wear-and-tear allowance of 25% per annum according to the straight-line method. The year-end of A Ltd is 31 May. Assume a taxation rate of 40%. Assume that A Ltd maintains a profit before provision for depreciation of R500 000 each year. Identify the depreciation amount that would be deducted to arrive at the profit for year for accounting purposes at 31 May 19.2. Select one: a. R20 000 b. R200 000 c. R50 000 d. R250 000
On January 31, 2022, RUBY Company agreed to pay the former president P300,000 under a deferred compensation arrangement. RUBY should have recorded this expense in 2021 but did not do so. The income tax expense would have been P70,000 lower in 2021 had it properly accrued this deferred compensation. What is the adjustment of retained earnings on January 1, 2022? A. ₱ 230,000 debit B. ₱ 300,000 credit C. ₱ 230,000 credit D. ₱ 370,000 debit
On 1 January 2020 a company purchased some plant. The invoice showed Cost of plant £61,000 Delivery of factory £850 One-year warranty covering breakdown during 2020 £700 Import duty £3,250 Installation fees £2,000 Modifications costing £3,150 were necessary to enable the plant to be installed. What amount should be capitalised for the plant in the company's accounting records?
a) ABC Lid acquired a new packing line from QE Ltd on hire purchase on January 1, 201 1. The cash price (list price) was GHS54,000. The hire purchase agreement is as follows: • Initial deposit payment of GH59,000 on January 1, 2011; Payment of two annual instalment of GHS24,000 on December 31 of 2011, 2012 and a final instalment of GHS20,39 1 on December 31, 2013. • Implicit rate of interest is 25% per annum. It is the policy of ABC to depreciate the PL on straight line basis over 10 years, with no salvage value. Required: Show the ledger entries for the above transactions in the books of ABC Ltd b) On 1 October 2018 XYZ Ltd acquired a machine under the following terms. Hours Manufacturer's base price Trade discount (applying to base price only) Early settlement discount taken (on the payable amount of the base cost only) Freight charges Electrical installation cost Staff training in use of machine Preproduction testing Purchase of a three-year maintenance contract Estimated residual…
5. AVZ Company requires refundable advance payments with special orders for machinery constructed to the customer’s specifications. Information for 2023 is as follows: Customer advances-balance, December 31,2022 P 885,00 Advances received with orders in 2023 1,380,00 Advances applied with orders shipped in 2023 1,230,00 Advances applicable to orders canceled in 2023 375,000 What amount should AVZ Company report as a current liability for customer’s deposits in its December 31, 2023 balance sheet if AVZ’s policy is to return the deposit if the customer notifies AVZ about the cancellation?