SUNWAY COLLEGE

DIPLOMA IN ACCOUNTING
TX4014 MALAYSIAN TAXATION
Tutorial 3

1. WJ Sdn. Bhd is a resident company in Malaysia manufacturing kitchenware. The company closes
its accounts to 31 December annually.

The profit and loss accounts for the year ended 31 December 2020 of the company is as follows:
Note RM RM
Sales 6,000,000
Less: cost of sales (2,000,000)
Gross Profit 4.000,000
Add: Other Income
Interest 10,000
Dividend (single tier) 20,000
4,030,000
Less: Expenses
Salaries, bonus and EPF 1 550,000
Depreciation 25,000
Entertainment expenses 2 80,000
Provision for doubtful debts 3 120,000
Advertising expense 4 200,000
Other deductible expenses 630,000 (1,605,000)
Profit before taxation 2,425,000

Additional notes relevant to the tax computation are as follows:

1. WJ Sdn. Bhd contributes EPF for all employees at 13% of their salaries and bonus, except for the
managing director where the company contributes 21% of his salary and bonus of RM150,000.

2. Entertainment expenses consist of RM30,000 on annual dinner for the employees and RM10,000
cash donation to an approved institution. The balance is for the entertainment of customers and
suppliers.

3. Provision for doubtful debts includes:

RM
Increase in general provision (trade) 30,000
Increase in specific provision (non trade) 20,000

4. Advertising expense comprises of RM100,000 on cost of development of website and RM100,000

on advertising in newspapers.

5. The capital allowance for the year of assessment 2020 was RM53,000.

6. The company’s issued paid up share capital id RM1.5 million.

Required:

Commencing from profit before tax, compute the chargeable income and the income tax payable
of WJ Sdn. Bhd. for the year of assessment 2020.

Notes:
You should indicate by the use of the word ‘nil’ any expense item referred to in the question for
which no adjusting entry needs to be made in the tax computation.

2. SH Sdn. Bhd is a trading company resident in Malaysia. The company closes its accounts to
30 June annually.

The profit and loss accounts for the year ended 30 June 2020 of the company is as
follows:
Note RM RM
Sales 2,400,000
Less: cost of sales (1,100,000)
Gross Profit 1,300,000
Add: Other Income
Interest 20,000
Dividend income remitted from
Singapore 10,000
1,330,000
Less: Expenses
Accounting and auditing fee 15,000
Secretarial fee 7,500
Depreciation 25,000
Entertainment expenses 1 120,000
Foreign exchange loss (realised) 2 38,000
Travelling expenses 3 108,000
Marketing expenses 4 412,000
Other deductible expenses 136,000 (861,500)
Profit before taxation 468,500

Additional notes relevant to the tax computation are as follows:

1. Entertainment expenses consist of RM80,000 on entertainment of customers and suppliers. The

balance is for the provision of food and drinks to the employees.

2. The foreign exchange loss consists of RM15,000 on non trade debts.

3. Travelling expenses comprise of:

RM
Sales person travelling expenses to outstation 60,000
Leave passage for Sales managers to Bangkok 25,000
Company family day in the Lost World, Tambun 23,000

4. Marketing expenses comprise of RM80,000 on gifts with logo of company’s products to customers
and RM5,000 on flowers for customers on opening new outlets and RM20,000 is for buying hampers
for customers on Hari Raya. The balance was incurred for sponsorship of a foreign cultural activity
approved by the Minister.

5. The capital allowance for the year of assessment 2020 was RM32,000. During the year, the
company sold a machine used in the business and the balancing allowance on the disposal was
RM8,200.

6. The company’s issued paid up share capital is RM3 million.

Required:
Commencing from profit before tax, compute the chargeable income and the income tax payable
of SH Sdn. Bhd. for the year of assessment 2020.

Notes:
You should indicate by the use of the word ‘nil’ any expense item referred to in the question for
which no adjusting entry needs to be made in the tax computation.