Required: Prepare the capital allowance and residual expenditure schedules for the above assets for the years of assessment 2018 to 2021.
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Question 6
(b) Tingtong bought the following assets during the year 2017 for his retail
business. The Inland Revenue has sent notice to him that he is being
audited for the years of assessment 2018 to 2022.
A van costing RM30,000
Air conditioner costing RM3,000
Table and chairs costing RM2,000
Computer costing RM4,000
Required:
Prepare the capital allowance and residual expenditure schedules for the above
assets for the years of assessment 2018 to 2021.
Explain and elaborate the answer according to the question. Thank you.
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Solved in 2 steps
- BFN3114: Tax Planning Tutorial 6: Capital Allowance & Industrial Building Allowance QUESTION 1 Mayfair Sdn. Bhd. which prepares account to 31.12 annually has the details of the following expenditures: RM'000 1. Plant and machinery (heavy) 2. Truck 200 300 3. Air- conditioners 50 These assets were acquired during the year 2016. Compute the capital allowance (Initial allowance & Annual Allowance) of the fixed assets for relevant years of assessnient (2016, 2017, 2017, 2018 & 2019)a. Identify the following transactions as either Capital Expenditure or RevenueExpenditure.i). Pay salary and wages for November 2020 amounting to RM6,200.ii). Purchase vehicle for business use amounting to RM145,000.iii). Depreciation expense for financial year ended 2020 amounting to RM21,000.iv). Purchase stationery for office use amounting to RM450.v). Acquire a building amounting to RM520,000.vi). Repair office door amounting to RM800.Question 4a. Ahmad bought a new equipment at RM120,000 on 1 July 2017. He wasundecided whether to depreciate the equipment using straight line method orreducing method at 20% per annum.The equipment is expected to have no residual value.You are required to calculate the amount of depreciation to be charged againsteach financial year ending 31 December 2017, 31 December 2018 and 31December 2019 using the straight line method and reducing balance method.Show your answer in the following format (per attache) b. The following are balances brought forward from 31 December 2018 for KCDeco Center :RM RMMotor Vehicles 100,000Less : Provision fordepreciation (20,000)80,000The motor vehicles were depreciated at 15% per annum using reducing balancemethod. KC bought a new vehicle on 1 October 2019, cost of the new vehiclewas RM120,000. You are required to prepare the following accounts for financialyear ending 31 December 2019 :i. The Motor Vehicle Accountii. The Provision for Depreciation…
- Exercise 13-29 (Algorithmic) (10.3) Sebastian purchases two pieces of equipment for $147,000. Appraisals of the equipment indicate that the fair market value of the first piece of equipment is $102,900 and that of the second piece of equipment is $161,700. What is Sebastian's basis in these two assets? If required, round your interim calculations to two decimal places. Use rounded amounts in subsequent computations. If required, round final answers to the nearest dollar. Sebastian's basis for the first piece of equipment is X and I X for the second piece of equipment.Lance is entering an invoice for a new item of equipment in the accounts. The invoice shows the following costs: Water treatment equipment $39,800 Delivery $1,100 Maintenance charge $3,980 Sales tax $7,854 Invoice total $52,734 Lance is registered for sales tax. What is the total value of capital expenditure on the invoice?QUESTION 2 The Lark Company purchases a warehouse on December 28, 2020 for $150,000 (which includes all capitalizable costs). They put the warehouse into service on January 1, 2021, assigning it a useful life of 28 years and a salvage value of $10,000. Enter your answers below in whole dollars without a $ sign (e.., х). a. Calculate the depreciable cost of the warehouse. b. Calculate the annual depreciation expense that Lark must recognize for the warehouse over the next 28 years. c. Calculate the net book value of the warehouse as of December 31, 2025 (after appropriate adjusting journal entry). d. As of December 31, 2025 (after appropriate adjusting journal entry), how much total additional depreciation expense should be recognized over the remaining useful life of the warehouse?
- Refer to the information for Cox Inc. above. What amount would Cox record as depreciation expense for 2019 if the units-of-production method were used ( Note: Round your answer to the nearest dollar)? a. $179,400 b. $184,000 c. $218,400 d. $224,000B. Upon expiration of the pioneer status, Brownish Bhd is planning to apply for reinvestment allowance. The following expenditure is expected to incur by the company in the year 2027 in relation to its business expansion program: Expenditure Purchase of land RM 4,000,000 Hi-technology plant and machineries New factory building Construction 1,900,000 2,660,000 of new automated storeroom 300,000 Office equipment 165,000 2027 Adjusted income Capital allowances Interest in RM 10,200,000 2,000,000 income 185,000Question 1 Komano Berhad purchased a piece of land on 1 April 2018 to be used as its warehouse site for RM120,000. In order for Komano Berhad to effectively use the site, a vacant and unoccupied old building on the land was demolished. A new building was then contructed and completed on 31 December 2018. The costs incurred during the period are listed below: Legal fees for obtaining legal tittle of the land RM 4,000 Demolition of the vacant building RM 8,000 Fees for architects in erecting the new building RM24,000 Property taxes on land (Beginning 1 April 2017) RM6,000 Loan obtained to construct the land, 10% RM100,000 Construction costs RM300,000 Scrapped materials resulting from the demolition of the old building were sold for RM4,000. Required: a) Ascertain the amount that Komano Bhd should capitalise as the cost of the land and the cost of new building, separately. b) Explain why each of the items listed were included or not included in your answer to part (a), justifying your…
- Exercise 14-20 (Algorithmic) (LO. 3) Sebastian purchases two pieces of equipment for $161,000. Appraisals of the equipment indicate that the fair market value of the first piece of equipment is $112,700 and that of the second piece of equipment is $177,100. What is Sebastian's basis in these two assets? If required, round your interim calculations to two decimal places. Use rounded amounts in subsequent computations. If required, round final answers to the nearest dollar. Sebastian's basis for the first piece of equipment is $ 43,953 X and $ 108,031 X for the second piece of equipment. Show Transcribed Text 1st equip 2nd equip 1st ratio 2nd ratio 1st basis 2nd basis S 112700 177100 289800 SUM(E10:E11) 0.39 =E10/(E12) 0.61 =E11/(E12) C 43828 E10 E14 108228 =E11*E15 112700 177100 289800 -SUM(G10:G11) 0.39 0.61 43953 =G10 G14 108031 =G11 G15A company resident in Jamaica purchased the following assets in 2021: Cost $ USD 38,000 50,000 4,000 72,000 Asset Honda Motor car purchased in March 2020 Heavy Equipment Computer (CPU) Factory Buildings (a) What would be the difference in capital allowances for 2022 if this company were resident in Trinidad and Tobago instead of Jamaica for tax purposes.View Policies Current Attempt in Progress In 2022, Windsor Ltd. recelved a grant for V208 million to defray the cost of purchasing research equipment for Its manufacturing facility. The total cost of the equipment is V104 million. Prepare the journal entry to record this transaction if Windsor uses (a) the deferred revenue approach, and (b) the reduction of asset approach. (Credit account titles are dutomatically indented when amount is entered. Do not indent manually f no entry is required, select "No Entry" for the account titles and enter O for the amounts. Enter amounts in full not rounded to millions) No. Account Titles and Explanation Debit Credit (a) (b) e Textbook and Media List of Accounts