TUTORIAL 2

QUESTION

Serai Meranti Sdn Bhd is a company which manufactures wooden furniture. The company
decides to expand its business by undertaking the project to manufacture wooden solid
windows. The projected profits and capital expenditure for 6 years are as follows:

Year ending on 31 2017 2018 2019 2020 2021 2022

December
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Land 1,000 2,000 Nil Nil Nil Nil

Factory building 8,000 Nil Nil 8,000 Nil Nil

Plant and machinery 10,000 5,000 2,000 8,000 8,000 Nil

Furniture and equipment 500 500 300 300 200 Nil

Adjusted income/(loss) (5,000) 12,000 12,000 25,000 15,000 30,000

Capital allowances 4,000 3,000 5,000 6,000 6,000 7,000

Required:
Compute the reinvestment allowance and tax payable for the company for all the relevant YAs.

END OF TUTORIAL QUESTION

 TUTORIAL 2

SUGGESTED SOLUTION

YA 2017 2018 2019 2020 2021 2022

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Adjusted income / Nil 12,000 12,000 25,000 15,000 30,000

(loss) (5,000)
(-) Capital Allowance Nil (7,000) (5,000) (6,000) (6,000) (7,000)
(4,000 c/f)
Statutory Income Nil 5,000 7,000 19,000 9,000 23,000
[SI]
(-) RA utilized Nil (3,500) (4,900) (13,300) (6,300) (1,400)
SI after exemption / Nil 1,500 2,100 5,700 2,700 21,600
balance of income
Net statutory income Nil 1,500 2,100 5,700 2,700 21,600

YA 2017 2018 2019 2020 2021 2022

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Adjusted income/(loss) Nil 12,000 12,000 25,000 15,000 30,000

(5,000)
Less: Capital allowance Nil (7,000) (5,000) (6,000) (6,000) (7,000)
(4,000 c/f)
Statutory Income [SI] Nil 5,000 7,000 19,000 9,000 23,000
(-) RA utilized Nil (3,500) (4,900) (13,300) (6,300) (1,400)
SI after exemption / Nil 1,500 2,100 5,700 2,700 21,600
balance of income
Net statutory income Nil 1,500 2,100 5,700 2,700 21,600

Less: Loss b/f Nil (1,500) (2,100) (1,400) Nil Nil

(3,500 c/f) (1,400 c/f)
Nil Nil Nil 4,300 2,700 21,600
Add: Other income Nil Nil Nil Nil Nil Nil
Aggregate income Nil Nil Nil 4,300 2,700 21,600
Less: CY loss Nil Nil Nil Nil Nil Nil
(5,000) c/f
Total Income / Nil Nil Nil 4,300 2,700 21,600
Chargeable Income
Income tax payable @ Nil Nil Nil 1,032 648 5,184
24%

END OF SUGGESTED SOLUTION