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Compute the statutory income of Verbatim Sdn Bhd

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Reference no: EM132858743

Question - Verbatim Sdn Bhd is a manufacturing company that produces keyboard.

In 2017, the company incurred the following transactions:

1) Purchased a new machine amounted to RM 72,900. The company also paid RM 5,000 as delivery cost and RM 1,800 installation cost.

2) Purchased an office equipment amounted to RM 40,000 for personal use and the additional costs incurred are as follows:

RM

Delivery cost 500

Installation cost 5% of asset cost

3) Acquired a new lorry on hire purchase and the details are as follow:

RM

Cost 135,000

Deposit 10 % of the cost

There were 72 monthly instalments commencing from March 2017.

Additional information:

1) Regarding the purchase of new machine, the company also incurred the cost of preparing a site for installation of machine amounted to RM 15,000.

2) In 2018, Verbatim brought that office equipment into the business. The equipment is depreciated at 5% using reducing balance method and the market value was RM 28,500.

3) In 2019, Verbatim dispose of the machine for RM 22,000.

4) Adjusted income of Verbatim Sdn Bhd for 2017, 2018 and 2019 were RM 132,000, RM 125,000 and RM 151,000 respectively.

Required -

a. Compute the statutory income of Verbatim Sdn Bhd for year of assessment 2019.

b. Explain THREE (3) types of guidelines that are used to distinguish business activities and investment activities.

Reference no: EM132858743

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