PAD3133 TAXATION II

ANSWER FOR PAST SEMESTERS’ PAPERS : CAPITAL ALLOWANCE

APRIL 2022

QUESTION 1 (20 MARKS)

lorry

YA 2019√ QE 80,000 √
IA (20%) (16,000)√
AA (20%) (16,000) √
RE 48,000

YA 2020 Disposed (35,000) √

BC 13,000
=====

Since the lorry was used for less than 2 years√, the balacing charges for YA 2020 is RM32,000. √

New Lorry

YA 2020√ QE 96,000√
IA (20%) (19,200)√
AA (20%) (19,200) √
RE 57,600
YA 2021 AA(20%) (19,200) √
RE 38,400
======
Honda City

Prinsipal per instalment = 88,000 – 20,000 / 20 = RM3,400

RM Capital allowance
(2/3)

YA 2020 √ QPE; Deposit 20,000 √

Instalment (1 x 3,400) 3,400 √√
23,400
IA: 20% (4,680) √ 6,240√
AA:20% (4,680) √
RE 14,040

YA 2021 Instalment (12 x 3,400) 40,800 √√

54,840
IA: 20% x 40,800 (8,160) √ 14,000√
AA: 20% x 40,800+23,400 (12,840) √√
RE 33,840
Computer

YA 2021√ QE 4,000√
AA(80%)√ (3,200) √
RE 800√

NOV 2021
QUESTION 1 (20 MARKS)

A. Identify and give reasons whether the following expenditures qualified as "qualifying
plant expenditure" under Schedule 3 of the Income Tax Act (ITA 1967):

i. A heavy machinery costing RM150,000 was bought in June 2021. RM20,000 was
incurred in preparing and levelling land in order to prepare a site for the installation of
equipment.
10% rule test applied.
(20,000 / 170,000) x 100 = 11.8%/ , more than 10%/
So exclude the cost of preparing RM20,000.
QPE = RM150,000/

ii.RM1,500 paid by the company to bid the plate number for it’s new lorry.
Non- QPE /

iii. A lorry costing RM100,000 was brought into use by Encik Azam for his sole
proprietorship business in Air Itam, Penang. The lorry were previously used by
Encik Azam for it’s partnership business in Indonesia. The net book value and the
market value of the lorry at the date of transfer were RM77,000 and RM68,000
respectively.
Lorry not qualify for capital allowance /– it was transferred from other business in
oversea./
B.
YA Machine RM
2020 QPE 115,000//
IA (20%) (23,000)/
AA(14%) (16,100)/
RE 75,900
2021 AA (14%) (16,100)/
RE 59,800/

YA Toyota Hilux RM
2018 Deposit 45,000/
Instalments (1,250 x 2) 2,500//
QPE 47,500
 IA (20%) (9,500)/
AA(20%) (9,500)/
RE 28,500

2019 Instalments (12 x 1,250) 15,000//

43,500
IA (20% x RM15,000) (3,000)//
AA 20% x (RM15,000 + 47,500) (12,500)//
RE 28,000

2020 Disposal (70,000)/

Balancing charge/ 42,000
Note: Since the car was used for less than 2 years, RM34,500 / - all capital allowances
claimed will be clawed back and treated as balancing charges./

YA Office Equipment RM
2020 QPE (para 2A) 18,000//
AA(10%) (1,800)/
RE 16,200
AA (10%) (1,800)/
2021 RE 14,400/

April 2021
Question 1
1 Lorry

Instalment of capital : (82,000 – 10,000)/ 60 = RM1,200 monthly

YA 2018 Deposit 10,000/

Installment (4times x RM1,200) 4,800//
14,800
IA (20% x 14,800)/ (2,960)
AA (20% x 14,800)/ (2,960)
RE 8,880
YA 2019 Installment (12times x RM1,200) 14,400//
23,280
IA (20% x 14,400)/ (2,880)
AA [20% x (14,800 /+ 14,400)/] (5,840)
RE 14,560

YA 2020 Disposal (50,000)/

Note: The lorry was disposed within 24 months of the acquisition date, therefore Balancing
charge = RM14,640 that is the total of capital allowance claimed in the previous years./
2 Computer

YA 2019 QPE (market value) para 2(a) 5,200//

AA (80% x 5200)/ (4,160)
RE 1,040

YA 2020 AA (80%/) (1,040)

RE 0 /

3 General machinery

(120,000 / 520,000) x 100 = 23% , exclude RM120,000 being site preparation.

QPE = RM400,000

YA 2020 QPE 400,000//

IA (20% x 400,000) (80,000)/
AA (14% x 400,000) (56,000)/
RE 264,000

4 PICKUP TRUCK

YA 2020 QPE (max) 100,000//

IA (20% x 100,000) (20,000)/
AA (20% x 100,000) (20,000)/
RE 60,000

(20 / = 20 Marks)

a. (i) Explain the tax treatment for the general machinery of Puncak Niaga Sdn. Bhd.
Rule 10% test /
(120,000 / 520,000) x 100 = 23% ,/ exclude RM120,000 being site preparation./
QPE = RM400,000

(3 marks)
(ii) Computer – Para 2A , QPE take the market value RM5,200 and there will be no Initial
allowance.
( 2 marks)
NOVEMBER 2020

QUESTION 1 (23 MARKS)

A.
YA CAR RM CA (60%)
2018 QPE 50,000//
IA (20%)/ 10,000 (10,000 x 60%)
+(10,000 x
AA (20%)/ 10,000 60%) =
RE 30,000 12,000/

2019 DISPOSAL(150,000/200,000) X 50,000 (37,500)//

BALANCING CHARGE 7,500

Since the car was disposed within 2 years

of acquisition ; Balancing charge =
12,000//

QPE machine : 10% rule test

(5,000/65,000) x 100 = 7.6% - include preparing site as QPE./
YA MACHINE RM
2019 QPE 65,000//
IA (20%)/ 13,000
AA (14%)/ 9,100
RE 42,900

2020 AA (14%)/ 9,100

RE/ 33,800

Installment of capital: (143,000 – 35,000)/36 months = RM3,000 each installment

YA LORRY RM
2019 DEPOSIT 35,000/
INSTALLMENT (1 X RM3,000) 3,000//
QPE 38,000
IA (20%)/ (7,600)
AA (20%)/ (7,600)
RE 22,800

2020 INSTALLMENT (12 X RM3,000) 36,000//

58,800
IA (20% X RM36,000)/ (7,200)
AA [20% X (36,000 + 38,000)]// (14,800)
RE/
36,800

a. Explain the tax treatment of Qualifying Plant Expenditure for the car in the above
question.
QPE = RM50,000 because the cost of car was RM200,000.