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Mr. Jack Mckenzie is a Australian citizen working with a which is based in Penang. He has been working with his company since 2000. He is 67 years old. He returned to the Australia permanently in 20 December 2019 as he was due to retire on 28 February 2020
The following information was provided in his return for the year 2019:
RM
i.
ii. iii. iv.
v. vi. vii.
viii. ix.
Further information provided is as follows:
He incurred RM20,000 on entertainment expenditure on official duties. The travel allowance is for official duties. The entertainment and travelling allowance were paid up to the end of 31 December 2019.
The company provided fully furnished bungalow till 31 December 2019. The rental RM5,000 (including RM1,000 for furnishings) was paid for by the company.
He was provided with a luxury car costing RM375,000 when new for the year 2019. The car was bought in 2010. The employer did not bear the cost of fuel for Bronson. McKenzie took an interest free loan of RM100,000 from his employer to finance his second car. The loan was given from the equity funds of the employer. The interest of the said loan would have been RM15,000 if it had been borrowed from a commercial basis.
Mrs. McKenzie is a housewife and they have two children. The first child is continuing a degree course in accounting at Putra University in Malaysia. The second child is 16 years old and he is attending an international school located at Subang Jaya. McKenzie is pursuing a postgraduate degree in Masters in Business Administration on a part time basis at a private university and he incurred fees amounting RM18,000 in 2019.
Mrs. McKenzie suffers from renal failure and had to go for a kidney transplant at a private medical centre in November 2019. McKenzie incurred medical expenses of RM45,000 during the year. His employer paid RM40,000 of the expenses.
McKenzie made a cash donation of RM10,000 to an approved organization
McKenzie made the normal contribution to Employees Provident Fund, which was equivalent to 11% of his salary.
INTI INTERNATIONAL UNIVERSITY
BACHELOR OF BUSINESS (HONS) - ACCOUNTING ACC4244: TAXATION
FINAL EXAMINATION: JUNE 2020 SESSION
Instructions: Answer any FOUR (4) questions in the answer spaces provided in the Blackboard.
QUESTION 1
Salary per month
Leave pay (January and February 2020) Bonus for the year 2019
Entertainment allowance per month Travelling allowance per month
Leave passage to France for family
Gratuity for years of service with the company
20,000 40,000 50,000 5,000 3,000 40,000 500,000
ACC4244 (F)/ Page 1 of 10
(a) McKenzie has heard that separate assessment will result in payment of a lower tax. Hence, Rizal is considering whether to elect joint assessment with his wife or separate assessment. Discuss the concept of separate assessment.