Compute the capital allowances and balancing charge

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Question - Heavy Metal Sdn Bhd (HMSB) commenced business on 1 April 2014 and closes its accounts on 31 December every year. Since commencement, the following assets were acquired by HMSB:-

(i) Heavy machinery

On 1 June 2014, HMSB purchased and installed a heavy machine in its factory for a total cost of RM2 million. The cost of installation was ascertained to be 1/5 of the total cost.

(ii) Motor car

A new Mercedes car was purchased in March 2015 for RM250,000 for its Marketing Director. The car was stolen in August 2017 and HMSB received an insurance compensation of RM180,000 in December 2017.

(iii) Office renovation

In 2017, HMSB renovated its office and incurred the following expenses:-

Expenditure RM

Renovation labour charges 200,000

Office furniture 300,000

Carpeting 100,000

Total 600,000

Required - Compute the capital allowances and balancing charge or balancing allowance (if any) on the qualifying expenditure for the above assets for the relevant years of assessment up to year of assessment 2017.

Reference no: EM132602136

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