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Mr. Yuen Fatt acquired a bungalow for a consideration of RM350,000. The sum was paid...

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Accounting

Mr. Yuen Fatt acquired a bungalow for a consideration of RM350,000. The sum was paid in full on 20.8.2019. The bungalow was transferred to him on 10.12.2019. There was no written agreement for the purchase of the bungalow. Other cost incurred by Mr. Yuen Fatt were as follows:

In January 2021, Mr. Yuen Fatt received RM30,600 from a developer as compensation for damages to his bungalow caused by piling work carried out on the adjacent land. (-)

In addition to that, Mr. Yuen Fatt also received RM11,200 from Insurance Company for said damage. (-)

In September 2021 he received a forfeited deposit RM10,000 from a potential buyer who eventually called off the deal. (-)

Required:

i. Compute the amount of acquisition price.

(12 marks)

ii. Explain THREE (3) examples of capital receipts that would reduce the acquisition price of a real property.

(6 marks)

(b) An allowable loss would arise when the disposal price is less than the acquisition price. Explain an allowable expenses under Real Property Gains Tax Act 1976.

(7 marks)

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