A manufacturing company, incurred capital expenditure on a factory building and machinery as follows, for the year ended 30 November 2021: Required: Compute the capital allowance(s), balancing allowance(s) and or balancing charge(s) for the year of assessment 2021. New factory:RMCost of land130,000Cost of construction480,000Legal fees and stamp duty(including fees for purchase ofland RM5,000)12,000Plant and design fees forbuilding55,000Total cost of factory677,000Plant and machinery;RMOffice equipment27,000Computer system98,000Motor car143,000Production machine (heavymachinery)580,000During the year, they sold the following:DisposalpriceCostResidualexpenditureRMRMRMUsed75,00020,00020,000motor car(purchasedin May2019)

Capital allowance: Capital allowance is the claim by a company on the capital expenditure incurred.…

Answered: Compute the capital allowance(s),…

Business

Accounting

Compute the capital allowance(s), balancing allowance(s) and or balancing charge(s) for the year of assessment 2021.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

A manufacturing company, incurred capital expenditure on a factory building and machinery as follows, for the year ended 30 November 2021:

Required:

Compute the capital allowance(s), balancing allowance(s) and or balancing charge(s) for the year of assessment 2021.

New factory:
RM
Cost of land
130,000
Cost of construction
480,000
Legal fees and stamp duty
(including fees for purchase of
land RM5,000)
12,000
Plant and design fees for
building
55,000
Total cost of factory
677,000
Plant and machinery;
RM
Office equipment
27,000
Computer system
98,000
Motor car
143,000
Production machine (heavy
machinery)
580,000
During the year, they sold the following:
Disposal
price
Cost
Residual
expenditure
RM
RM
RM
Used
75,000
20,000
20,000
motor car
(purchased
in May
2019)

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