A. Bina Ria Sdn Bhd (BRSB) is a local resident company incorporated in 2011 for the manufacture of floor tiles. It is resident in Malaysia and closes the accounts to 31 December each year. In 2017, the company wanted its own factory and accordingly purchased a piece of land and completed construction in April 2018. The relevant expenditure incurred is as follows: Bina Ria Sdn Bhd Particulars of expenditures Cost of land Legal fee for transfer of land | Clearing of land Cutting and levelling land Excavation and preparation of site for construction Piling and foundation works Construction of wall Construction of building Architect fee- building design Legal services for obtaining various building approval | Subcontract charges for installing of wiring and plumbing RM 312,000 31,193 116,973 70,184 63,165 113,074 27,294 278,897 109,175 50,688 57,707 2/7 АСТ3402 CONFIDENT- Landscaping charges |Total 62,386 1,292,736 The production demand exceeded expectation and the factory building was found to be inadequate to support the demand. BRSB decided to buy a new factory building nearby. The existing land and factory building was sold for RM1.8 million in October 2020. It was agreed that the land portion of the sale was RM800,000. Required: Compute the following: a) The qualifying industrial building expenditure b) The industrial building allowance due for the years of assessment 2018 to 2020; and c) The balancing allowances or charges upon disposal of land and the building in 2020.
A. Bina Ria Sdn Bhd (BRSB) is a local resident company incorporated in 2011 for the manufacture of floor tiles. It is resident in Malaysia and closes the accounts to 31 December each year. In 2017, the company wanted its own factory and accordingly purchased a piece of land and completed construction in April 2018. The relevant expenditure incurred is as follows: Bina Ria Sdn Bhd Particulars of expenditures Cost of land Legal fee for transfer of land | Clearing of land Cutting and levelling land Excavation and preparation of site for construction Piling and foundation works Construction of wall Construction of building Architect fee- building design Legal services for obtaining various building approval | Subcontract charges for installing of wiring and plumbing RM 312,000 31,193 116,973 70,184 63,165 113,074 27,294 278,897 109,175 50,688 57,707 2/7 АСТ3402 CONFIDENT- Landscaping charges |Total 62,386 1,292,736 The production demand exceeded expectation and the factory building was found to be inadequate to support the demand. BRSB decided to buy a new factory building nearby. The existing land and factory building was sold for RM1.8 million in October 2020. It was agreed that the land portion of the sale was RM800,000. Required: Compute the following: a) The qualifying industrial building expenditure b) The industrial building allowance due for the years of assessment 2018 to 2020; and c) The balancing allowances or charges upon disposal of land and the building in 2020.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:A. Bina Ria Sdn Bhd (BRSB) is a local resident company incorporated in 2011 for the
manufacture of floor tiles. It is resident in Malaysia and closes the accounts to 31
December each year. In 2017, the company wanted its own factory and accordingly
purchased a piece of land and completed construction in April 2018. The relevant
expenditure incurred is as follows:
Bina Ria Sdn Bhd
Particulars of expenditures
Cost of land
Legal fee for transfer of land
Clearing of land
Cutting and levelling land
Excavation and preparation of site for construction
Piling and foundation works
Construction of wall
Construction of building
Architect fee- building design
Legal services for obtaining various building approval
Subcontract charges for installing of wiring and plumbing
RM
312,000
31,193
116,973
70,184
63,165
113,074
27,294
278,897
109,175
50,688
57,707
2/7
АСТ3402
CONFIDEN'rme
Landscaping charges
|Total
62,386
1,292,736
The production demand exceeded expectation and the factory building was found to be
inadequate to support the demand. BRSB decided to buy a new factory building nearby.
The existing land and factory building was sold for RM1.8 million in October 2020. It was
agreed that the land portion of the sale was RM800,000.
Required:
Compute the following:
a) The qualifying industrial building expenditure
b) The industrial building allowance due for the years of assessment 2018 to 2020; and
c) The balancing allowances or charges upon disposal of land and the building in 2020.
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