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Compute the capital allowances and balancing allowance

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Reference no: EM132574893

Wycot Sdn Bhd was incorporated on 1 October 2016 and makes up its accounts annualy to 31 December. The business of textile manufacturing commenced on 1 February 2017.

The following capital expenditures were incurred during the financial year ended 31 December 2018:

Date            Expenditure Amount (RM)        Annual

                                                        allowance rate (%)

                        Heavy machinery 20

05.12.2017             Deposit                        200,000

01.05.2018        Full payment                    800,000

12.01.2018          Forklift                             14

(Hire purchase):

                       Total cost                         130,000

01.02.2018          Down payment                     20,000

Total installment payments

-                  Principal                                38,000

-               Interest portion                          7,580

05.04.2018        Motor vehicle                20

(Second hand Toyota

Camry for Staff use)                               86,000

01.05.2018          Computer                    8,000 40

01.11.2018           Office equipment           10

                           Deposit                       10,000

                   Full payment (principal)           50,000

The computer was found to be unsuitable after nine (9) months of usage. It was disposed of for RM4,000 on 1 December 2018. The DGIR has accepted the reason for the disposal.

Required:

Question 1: Compute the capital allowances, balancing allowance/charge in respect of the relevant assets for YA 2018

Reference no: EM132574893

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