TUTORIAL

CAPITAL ALLOWANCES
ACC 1113

Question 1

Amir Bhd purchase some assets for the use of business. Following were the details of the
assets :

1. Motor Car

The motorcar was purchased on 1 Januari 2001 for RM160,000. The motorcar was
not licensed as commercial vehicle. It was originally bought for Mr. Amir’s private
use and later brought into business in August 2003. The market value of the car was
RM125,000 and the book value was RM128,000 on the date of transfer.

2. Van

The cost of the van is RM80,000 and was purchased on 15 May 2004. The van was
used as a transport material to customers.

3. Computer

The computer was purchased on 1 September 2003. The computer was purchased
under a hire purchased scheme. The following was the details of hire purchase:

Hire purchase price : RM 40,000

Cash price : RM 34,000
Deposit : RM 10,000 (paid on 1 September 2003)
Monthly installment : RM1,500 (1st installment begins on 1 October
2003)
Installment is paid on the 1st of every month.

The computer was trade in on 1 April 2006 with another computer cost RM 50,000
and the trade-in value of the old computer was RM10,000.

4. The printing machine was installed in 2003. The installation cost was RM20,000 of
which RM15,000 was for site preparation. The installation cost was included in the
cost price in the fixed asset register.

Required:

Compute the capital allowances, balancing charge and / or balancing allowances for all the
relevant years of assessment up to year of assessment 2006.
Question 2

Encik Khalil is the owner of a construction supplies business, Ninja Sdn Bhd. The financial
year ends on 30 September. The following are the assets used in the business :

1. A facsimile machine purchased on 25 July 2004 for RM8,500. It was sold on 1

February 2006 for RM6,200.

2. A van was bought in February 2003 for RM 118,000. The vehicles was licensed for
commercial transportation. On 24 October 2006 the van was sold for RM80,000.

3. A motor vehicles was acquired on 25 August 2005 under a hire-purchase terms for
which a deposit of RM44,000 was paid. The cash price was RM140,000. The hire
purchase loan consist of 48 installment. The first installment commenced on 16
September 2005. The IRB, Malaysia has determined that only one-third of its usage
was for business purpose.

Required :

Compute the capital allowances, balancing charge or allowances (if any) that can be claimed
by Encik Khalil for all the relevant years of assessment up to year of assessment 2006.

Question 3

Encik Abdul is the owner of Mutiara Sdn Bhd. The financial year ends on 31 October. The
following are the assets used in the business:

Assets Date of purchase Cost (RM)

Photostat machine 1 November 2005 RM 7,800

Motor car not licensed for 30 June 2005 RM 132,000

commercial transportation Hire Purchase Term
Cash price RM132,000
Deposit RM 32,000
Number of installment = 36 month
First installment on 16 July 2005
The motor car was sold on 2008 for
RM85,000.

Bulldozer 25 August 2006 RM 158,000

Required:

Calculate the capital allowances, balancing charge or balancing allowances (if any) for the
relevant years of assessment up to years of assessment 2008.
Question 4

Way Sdn Bhd is involved in general trading and closes its accounts on 30 June annually.
Information regarding fixed assets of Way Sdn Bhd were as follows:

RM
11 June 2004 Purchased an Office Equipment 25,000
The office equipment was sold on 31 July 2007 for RM 10,500.

1 December 2006 Bought a car for the manager through hire purchase (not licensed
for commercial use). It is agreed that half of the car usage was for
private purposes.

Hire Purchase Price RM 145,000

Deposit 25,000
Cash Price 105,000
Monthly installment for 48 months starting 31 December 2006.

1 July 2007 A van owned by the owner that was used in Singapore and was
brought into use in business in Malaysia :

Cost (purchased on 2 February 2004) RM 88,000

Market value on 1 July 2007 45,000
Net book value on 1 July 2007 47,000

Required :

Calculate the capital allowances, balancing charge or balancing allowances (if any) for the
relevant years of assessment up to years of assessment 2008.