Reference no: EM132926791
Question 1
Fresh Fruit Sdn Bhd ("FF"), a Malaysian tax resident company, is engaged in the business of selling fresh imported fruits. FF started its operations on 1 March 2019 with the opening of its first retail outlet.
FF has issued and paid up ordinary share capital of RM2,000,000 and prepares its accounts to 31 December annually.
FF's Statement of Comprehensive Income for the financial year ended 31 December 2020 is as follows:
|
|
Note
|
RM'000
|
RM'000
|
|
Revenue
|
|
|
12,500
|
|
Cost of goods sold
|
1
|
|
(6,350)
|
|
Gross profit
|
|
|
6,150
|
|
Other income
|
2
|
|
225
|
|
Less: Administration expenses
|
|
|
|
|
Depreciation of property, plant and equipment
|
|
550
|
|
|
Recruitment expenses
|
|
17
|
|
|
Insurance
|
|
300
|
|
|
Audit fees
|
|
125
|
|
|
Repairs and maintenance
|
|
20
|
|
|
Salaries, bonuses and allowances
|
3
|
1,974
|
|
|
Overseas travelling
|
4
|
38
|
|
|
Utilities
|
|
480
|
|
|
Rental of outlet
|
|
1,350
|
|
|
Business zakat
|
|
75
|
|
|
Donations
|
5
|
10
|
|
|
|
|
|
(4,939)
|
|
Less: Selling and distribution expenses
|
|
|
|
|
Promotional expenses
|
|
110
|
|
|
Samples
|
|
20
|
|
|
Advertisements
|
|
25
|
|
|
Salaries, bonuses and allowances
|
|
800
|
|
|
Fixed assets written off
|
|
7
|
|
(962)
474
Less: Finance costs (260)
Profit before taxation 214
|
Note:
1.
|
Cost of sales included the followings:
|
|
|
|
|
RM'000
|
|
|
Stocks written off due to damage during shipment
|
110
|
|
|
Freight charges
|
62
|
|
|
Provision for stock obsolescence
|
175
|
|
|
Provision for stock obsolescence no longer required
|
(47)
|
|
|
New "Halal" certification expenses (Certificate in Year of
|
|
|
|
Assessment 2020)
|
15
|
|
2.
|
Other income included the followings:
|
|
|
|
|
RM'000
|
|
|
Dividend income from Singapore investment
|
140
|
|
|
Interest income from placement of fixed deposit
|
50
|
|
|
Warehouse sales
|
35
|
|
3.
|
Salaries, bonuses and allowances comprised the followings:
|
|
|
|
|
RM'000
|
|
|
Salaries
|
1,150
|
|
|
Directors' remuneration
|
300
|
|
|
Directors' fees
|
25
|
|
|
Bonus provision for current year
|
290
|
|
|
Provision for bonus written back
|
(60)
|
|
|
Shift allowance
|
50
|
|
|
EPF and SOCSO
|
219
|
|
4.
|
Overseas travelling included the followings:
|
|
|
|
|
RM'000
|
|
|
Airfare for Managing Director's wife
|
18
|
|
|
Expenses (airfare and accommodation) to attend Sales and
|
|
|
|
Service Tax conference incurred by Finance Executive
|
4
|
|
|
Expenses incurred to entertain existing clients
|
10
|
5. Donations amounting to RM10,000 were made to Yayasan Jantung Negara (an approved institution).
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6.
|
Promotional expenses included:
|
|
|
|
|
RM'000
|
|
|
Shopping vouchers for suppliers' annual dinner
|
10
|
|
|
Purchase of new signage
|
35
|
|
|
Trade advertisements
|
59
|
|
|
Supply of colour pencils to "adopted" school for CSR activity
|
6
|
7. Advertisements included an amount of RM15,000 in respect of a congratulatory message for 63rd Merdeka Celebration.
8. Salaries, bonuses and allowance comprised the followings:
RM'000
Salaries 540
Bonus provision for current year 80
EPF and SOCSO 140
Mileage and meal allowances 18
Team building workshop* 22
*The Team building workshop expenses represent fees paid to Mr Simon Lee, a Singapore tax resident who conducted the training in Malaysia specifically for FF's sales team.
FF paid Mr Simon Lee for his services on 15 June 2020.
No withholding tax was remitted to the Inland Revenue Board.
9. Finance costs comprised the followings:
RM'000
Bank charges 50
Realised foreign exchange loss - trade 90
Interest expense to finance the purchase of the Singapore
investment 60
Hire purchase interest 5
Trust receipt interest expense 55
10. The opening balances of the provision accounts are:
RM'000
Bonus 120
Stock obsolescence 39
Bad debts (general) 87
The closing balances of the provision accounts are:
Breakdown of provision accounts
RM'000
Bonus 50
Stock obsolescence 167
Bad debts (general) 60
Legal action has been taken against trade receivables written off during the year.
11. Hire purchase creditors
Principal portion
Interest Balance carried forward
Camry Hybrid (Company car for Managing Director) was purchased on 21 January 2020
RM'000 RM'000 RM'000
Cost 170
Less: Deposit (34)
136 17 153
Less: Repayment during the year (21) (5) (26)
115 12 127
12. Qualifying capital expenditure brought forward
RM'000
|
Furniture and fittings (annual allowance rate: 10%)
|
60
|
|
Computers (annual allowance rate: 80%)
|
23
|
|
Residual expenditure brought forward Furniture and fittings
|
42
|
|
Computers
|
-
|
Tables costing RM10,000 with net book value of RM7,000 were written off due to damage. The acquisition date of the tables was 25 February 2019.
Required:
Compute the tax payable of Fresh Fruit Sdn Bhd for the YA 2020, showing all the relevant adjustments including the capital allowance calculations and ‘Nil' where no adjustment is needed.