question archive 1) NIzas Development, a partnership in property development business, owned by Niza and Iza
1) NIzas Development, a partnership in property development business, owned by Niza and Iza
Subject:LawPrice: Bought3
1) NIzas Development, a partnership in property development business, owned by Niza and Iza. The business has two on-going projects concurrently. Project A is expected to be completed by 2021 and Project B by fourth quarter of 2022. The following information is provided by the partnership:
Total estimated profit of the projects:
Project A RM43,200
Project B RM55,880
Total cost of the projects:
Project A RM34,400
Project B RM78,600
Payment received and receivable:
|
|
2019 |
2020 |
2021 |
2022 |
|
Project A |
30,300 |
35,800 |
11,500 |
- |
|
Project B |
48,950 |
48,880 |
21,100 |
15,550 |
REQUIRED:
Compute the estimated gross profit for each relevant years of assessment of the two projects.
2. Based on the information in (A) above, in year 2020, there is a variation in the development cost in respect of Project B. Accordingly, the increment of RM4,400 in the total cost had resulted in a change of the estimated gross profit.
REQUIRED:
Discuss tax implication and treatment due to the increment of the total cost on the estimated gross profit for each year of the Project B. Justify your answer and support with workings.
