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Open with Google Docs Mr. Hafiz runs a mini market next to his housing area in Cyberjaya, Selangor. He has been in the business for several years. He is assisted by few staffs and on ad hoc basis by his wife, Sarah. The income statement of the business for the year ended 31 December 2021 is as follows: Income Statement for the year ended 31 December 2021 Notes RM 000 RM'000 Sales 1 759 Less: Cost of sales 2 (387) Gross profit 372 Less: Operating expenditure Depreciation Salaries and wages Marketing expense Repairs and maintenance Motor vehicle expenses Donations Utilities Professional fees and subscriptions EPF contribution Entertainment 3 4 5 6 7 45 180 2 39 7 1 36 4 24 15 8 9 10 Net profit ( (353) 19 Notes: 1. 2. 3. Including in the Sales is December credit sales of RM5,000. Customers will settle the payment within 30 days (in Jan 2022) of the transactions. Included in the Cost of sales are: Provision for stock obsolescence of RM5,000 Cost of computer purchased for personal use of RM3,000. Other than salaries for employees, included under salaries and wages are: Bonus for employees of RM20,000 Salary paid to his wife, Sarah for assisting in the shop of RM15,000 Salary paid to officially certified handicapped staff RM24,000. Marketing expense refers to flyers and advertising expenses incurred to promote the business. Repairs and maintenance include (1) the cost of renovation and extension of the shop of RM10,000, (ii) repair of photostat machines of RM2,000 and (iii) Other office maintenances of RM27.000. Continue... Motor vehicle expenses includes: Fine for traffic offences of RM1,000. 4. 5. 6. Repair and maintenance of the vehicles used in the business of RM6.000. 7. Donations A cash donation of RM1,000 was made to the Blind & Deaf Foundation of Malaysia, an approved non-profit organization body. 8. Professional fees and subscriptions include: Audit and tax fees of RM3,000 Annual membership fee paid to Mr. Hafiz favorite political party of RM1.000. 9. Employee Provident Fund (EPF) contribution expenses are determined at the rate of 20% from the salaries and wages paid. 10. Entertainment: expenses include: RM Staff's family day 5,000 Staffs annual dinner 6,000 Mr. Hafiz's family trip to Singapore 3,000 Birthday gift for Mr. Hafiz's wife and son 1,000 Capital allowance available for the business is RM42,000. Balancing charge is RM3,000 and balancing allowance is RM6,900. Required: For the year of assessment 2021, assuming taxpayers elect for separate assessment, compute the Statutory Income of Mr. Hafiz.
