SECTION A: Structured Questions (50 marks)
This section consists of THREE (3) questions. Answer ALL questions.
1. ABC Sdn Bhd was incorporated on 1 October 2015 and commenced operations on 1 November 2015. It is contemplating closing its first set of accounts to one of the following alternative dates:
i. 1.11.2015 – 30.04.2016
ii. 1.11.2015 – 31.10.2016
iii. 1.11.2015 – 31.01.2017
a) Determine the basis period for all of the above alternative dates until the year of assessment 2017.
b) Explain the importance of commencement date and year end date to the business.
(Total: 12 marks)
2. ABC University, a private university, is an emerging global brand name that has given education a new perspective, dropping old notions of how people should be educated. Due to high demand, the university decided to expand its service and constructed new building in 2013. The details of its expenditure incurred are as follows:
i. Building for classroom
Cost of constructing a building for classroom amounting RM406,800. The building was completed in July 2014 and brought into use in August 2014. It was identified that 15% of the building was used as an office and the rest of the building was used as a classroom (Paragraph 42B).
ii. Cafeteria for staff and students
Cost of constructing a cafeteria for the use of staff and students amounting to RM150,000. The building was completed on 1 October 2014. Due to some technical problem, the building was sold on 31 July 2015 at RM215,000.
iii. Machinery installed at laboratory room
A machine was purchased at the cost of RM100,000. The university incurred cost of preparing the site to install the machine amounting to RM275,000. The generator was brought into use in August 2014.
a) Compute the industrial building allowances or charges (if any) for all the relevant years of assessment up to year of assessment 2015.
b) State any FOUR (4) other buildings that treated as industrial building.
(Total: 24 marks)
3. Green Plantation Sdn Bhd was incorporated on 1 January 2017 to carry out a business of a large-scale organic vegetable farm. The company prepares its account to 31 December. The capital expenditures incurred by the company are as follows:
01/02/17 Cost of land 500,000
01/04/17 Clearing of land 280,000
20/06/17 Green house and store 500,000
01/08/17 New planting 300,000
On May 2018, the company received a grant from government for clearing of land amounting RM45,000. The farm was sold to MSU Sdn Bhd on 1 July 2019 for RM2 million. Quest Plantation made an election to spread back the agriculture charge. The accounting year end for MSU Sdn Bhd is 30 September 2019.
a) Calculate the agriculture allowance or charges (if any) for JKL Plantation Sdn Bhd up to year of assessment 2019.