Capital Allowances Tutorial: Motor Vehicles & Equipment Analysis
School
University of Tunku Abdul Rahman**We aren't endorsed by this school
Course
ACCOUNTING 100
Subject
Accounting
Date
Dec 11, 2024
Pages
4
Uploaded by BrigadierMask28423
TUTORIAL 10 Question 1 A motor car which cost RM100,000 has been wholly used in its owner’s sole trader business since its acquisition on 12 January 2021. On 21 November 2023, the owner traded in the motor car for a new van to be wholly used in his business. Details are as follows: $ Cost of the van 110,000 Trade-in value of the motor car (62,000) ——— Hire purchase loan (excluding interest) 48,000 ——— Total number of instalments 24 Date of first instalment 1 December 2023 Required: (i)Compute the capital allowances in respect of the motor car for the years of assessment 2021 and 2022 and the balancing allowance/charge upon its disposal in the year of assessment 2023; (ii) Compute the capital allowances in respect of the van for the years of assessment 2023. Question 2 Niaga Sdn Bhd is an established trading company that has a financial year end of 31 December, annually. During the year ended 31 December 2023, Niaga Sdn Bhd acquired the following additional assets for cash: RM Van 120,850 Motor car 183,050 Computers 45,000 Photocopy machine 8,000 The photocopy machine was acquired on 10 January 2023. After a few months’ use in the business, it was found to be unsuitable and was sold on 28 September 2023 for RM5,500. Assets that were brought forward from the year of assessment 2023 are as follows:
Cost Residual expenditure b/f RM RM Filing cabinets 12,000 7,200 Projector 23,000 13,800 The projector was disposed of in May 2023 for RM26,000. Required: Compute the capital allowances for Niaga Sdn Bhd for the year of assessment 2023, together with the amounts of residual expenditure carried forward and the balancing charge/allowance in respect of each of the disposals (the photocopy machine and the projector) in the year of assessment 2023. Question 3 Blueray Sdn Bhd (BSB) is involved in the manufacturing of office furniture. The company closes its accounts to 31 December each year. The capital expenditure incurred by the company was as follows: Motor Vehicles (i)On 1 October 2020, BSB purchased a lorry to transport the office furniture to the customer’s office. The cost of the lorry was RM250,000. The lorry was disposed on 31 May 2023 for RM150,000. (ii)On 1 July 2021, BSB purchased a car for the Chief Executive Officer. The car was purchased under hire purchase financing terms as follows RM Cash price 200,000 Deposit paid on 1 July 2021 20,000 Hire purchase interest 40,000 Total hire purchase price 220,000 The hire purchase price is repayable in 20 equal instalments commencing on 1 August 2021. Machinery On 28 April 2021, BSB purchased a machine at a cost of RM300,000. The company incurred additional cost of RM40,000 for preparing the site for the installation of the machinery and RM20,000 for installation cost. Required: Compute the capital allowances, balancing allowance/balancing charge and residual expenditure for the relevant years of assessment up to the year of assessment 2023.
Question 4 Klang Telecommunications Sdn Bhd operates a retail business selling telecommunication equipment. The company’s accounts are prepared to year ending 31 December each year. A new lorry was acquired on hire-purchase terms during the year for delivery purposes during the year ended 31 December 2019.Amount RM Cost of lorry 110,000 Less: Deposit (15,000) Hire purchase finance 95,000 HP interest 28,000 Total sum payable 123,000 The outstanding sum is repayable in 60 equal monthly installments from 1 January 2019. The lorry was sold on 1 August 2022 for RM74,000. Required: Compute the capital allowances, balancing allowance/charge and residual expenditure for the years of assessment 2019 to 2023. Question 5 AF Bhd a food manufacturing company and closes its accounts on 31 December every year. Since commencement, the following assets were acquired by AF Bhd: • Motor vehicle AF Bhd purchased a commercial van cost RM 150,000 through hirepurchase in August 2018 for delivery purpose. A deposit of RM 30,000 was paid in August 2020 for 48 instalments. The first instalment commencement on 1st September 2020. In Jan 2021, AF Bhd purchase a new Honda CRV cost RM 140,000 for its Marketing Manager. However, the car met in an accident in October 2023. The company received an insurance compensation of RM 50,000 in December 2023 and replace a brand-new Toyota car Camry worth RM 100,000 on the same date. •Office equipment In 2023, AF Bhd has purchased new equipment for the factory stated as below: Expenditure Air-condition RM 1,200 Cabinet RM 1,000 Meeting Table RM 1,210 Photocopy Machine RM 1,100
Required: Compute all capital allowance available for all relevant years and balancing charge or balancing allowance for year of assessment 2023.