T3 Corporate Tax Q1 Q2 2

Lecture 3 : Corporate Tax
Tutorial Question
Question 1
Dinishah Sdn Bhd manufactures glass products for both the local and export markets. The company's income statement for the year ended 31 December 2011 is as follows:

Notes RM Sales revenue

1,200,000 Less: Cost of sales 1 (230,000) Gross profit

970,000 Operating expenses 2-6 (650,000) Profit before tax

320,000
Notes
1
Cost of sales includes the following: RM

Provision for stock obsolescence 5,000

Insurance premium paid to a company incorporated in Malaysia,

for insuring raw materials supplied from Hong Kong 6,000

11,000

RM 2
Staff welfare costs includes leave passage for a director. 15,000

3
The company incurred the following charges: RM

Interest on overdue trade account payables 5,000

Interest on overdue corporate credit card account 2,500

Legal fees on securing a new term loan 12,000

19,500

4
Bad and doubtful debts (all trade in nature) are as follows: RM

Bad debts written off during the year 10,000

General provision at year end 31 December 2011 15,000

Specific provision at year end 31 December 2011 12,000

Bad debts recovered during the year (9,000)

General provision at 31 December 2010 (12,000)

Specific provision at 31 December 2010 (7,500)

Charged to income statement 8,500

5
Donations and social contributions RM

(i) Donations:

In cash to:

- a womens' cancer centre (this is an approved community project) 15,000

- a project of national interest (approved by the minister) 6,500

Manuscript to the government (valued at RM 100,000 by the Department of Museum Malaysia)

204,000

225,500

(ii) As the company's shareholders are Muslim, the company contribute 'zakat perniagaari of RM210,000 during the year.
(iii) The company's office building was