ABC Inc. is a Canadian-controlled private corporation involved in residential rentals and maintenance services. Mr. Jack...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
ABC Inc. is a Canadian-controlled private corporation involved in residential rentals and maintenance services. Mr. Jack is the sole shareholder and all work is done by him and his wife. He has been in this business for the past 10 years. He has decided that this is the year for him to take some big dividends and enjoy life. Maintenance services Interest income from Canadian sources (Note 2) Dividends from taxable Canadian corporations (Note 3) Taxable capital gains on sale of a rental building Recapture of CCA on the sale of the rental building Net Rental income Division B income (income for tax purposes) Notes and additional information: (1) The company has an unused net capital loss of $25,000 from 2019. (2) The Canadian interest is from the following sources: Long term bond investment Bank interest on fluctuating cash working capital (3) Dividends received during 2021: Eligible dividends from non-connected companies Non-Eligible Dividends from XYZ Inc. $246,000 54,000 107,200 70,000 20,000 35,000 $532,200 $ 50,000 4,000 $ 54,000 $ 40,200 67,000 $107,200 (4) The company has agreed to allocate all of the annual business limit to it's subsidiary's company. Required: Calculate the Taxable Income and Part I Taxes Payable for the year ending December 31, 2021 for ABC Inc. Clearly presenting all component parts and the calculations (10 marks) ABC Inc. is a Canadian-controlled private corporation involved in residential rentals and maintenance services. Mr. Jack is the sole shareholder and all work is done by him and his wife. He has been in this business for the past 10 years. He has decided that this is the year for him to take some big dividends and enjoy life. Maintenance services Interest income from Canadian sources (Note 2) Dividends from taxable Canadian corporations (Note 3) Taxable capital gains on sale of a rental building Recapture of CCA on the sale of the rental building Net Rental income Division B income (income for tax purposes) Notes and additional information: (1) The company has an unused net capital loss of $25,000 from 2019. (2) The Canadian interest is from the following sources: Long term bond investment Bank interest on fluctuating cash working capital (3) Dividends received during 2021: Eligible dividends from non-connected companies Non-Eligible Dividends from XYZ Inc. $246,000 54,000 107,200 70,000 20,000 35,000 $532,200 $ 50,000 4,000 $ 54,000 $ 40,200 67,000 $107,200 (4) The company has agreed to allocate all of the annual business limit to it's subsidiary's company. Required: Calculate the Taxable Income and Part I Taxes Payable for the year ending December 31, 2021 for ABC Inc. Clearly presenting all component parts and the calculations (10 marks)
Expert Answer:
Related Book For
Introduction To Federal Income Taxation In Canada
ISBN: 9781554965021
33rd Edition
Authors: Robert E. Beam, Stanley N. Laiken, James J. Barnett
Posted Date:
Students also viewed these accounting questions
-
ABC Co. is a Canadian controlled private corporation that acquired 100% of the shares of XYZ Co. in Year 1 for $50000. New Co., an arm's length corporation, is now interested in purchasing ABC Co.'s...
-
Indusco Inc. is a Canadian Controlled Private Corporation (Company). Its taxation year ends on December 31 of every year. The Companys condensed income statement is given below. Revenue 2846000...
-
Kitchen World Inc. is a Canadian controlled private corporation (CCPC) that operates a retail business selling cooking utensils, knives and small appliances for both professional chefs and home...
-
The indicating instruments with linear scale is Electrostatic instrument a O Thermocouple instrument.bo Dynamometer instrument C PMMC.d O
-
The readership of a Sunday newspaper has the following characteristics. What are the quotas for a sample of 2,000 readers? Design a spreadsheet to find the quotas in each category for different...
-
The Friersons have a two-story building in Easley, South Carolina, that shares a common wall with an adjacent two-story building owned by David and Patricia Watson. An outdoor stairway located on the...
-
Cyclops Inc., a high-technology company specializing in state-of-theart visual technology, is considering going public. While the company has no revenues or profits yet on its products, it has a...
-
The number of cars arriving per hour at Lundbergs Car Wash during the past 200 hours of operation is observed to be the following: NUMBER OF CARS ARRIVING FREQUENCY 3 or fewer ............. 0 4...
-
Fine Press is considering replacing the existing press with a more efficient press. The new press costs $65,000 and requires $15000 in installation costs. The old press was purchased 4 years ago for...
-
The adjusted trial balance columns of the worksheet for Eagle Company, owned by Jeff Spiegel, are as follows. Instructions (a) Complete the worksheet by extending the balances to the financial...
-
Following are preacquisition financial balances for Padre Company and Sol Company as of December 31. Also included are fair values for Sol Company accounts. Padre Company Sol Company Book Values Book...
-
1. Exhaust gases flowing through a tubular heat exchanger at the rate of 0.3 kg/s are cooled from 400C to 120C by water initially at 10C. The specific capacities of exhaust gases and water may be...
-
A concentric tube heat exchanger is used to condense steam on the outside of the tubes while cold water flows through the inner tube. The steam enters and condenses at 100 C. The water enters at 26C...
-
Aronian Import received an invoice dated January 5 for a shipment of goods received January 11. The invoice was for $ 65525 less 8% with terms 3/20 R.O.G. (a)How much should Aronian Import pay on...
-
At present the proportion of the total market for ice cream is shared between two brands A and B holding 20 and 80 percent share respectively. Every year, 30% of the consumers of Brand B shift to...
-
You have your own company, the EIE0120, a LLC. This company produces stamped metal parts. You have been asked by a current customer to provide a quotation for a product that is similar to but...
-
The following data represent the number of appointments made per 15-minute interval by telephone solicitation for a lawn-care company. Assume these are population data. Number of appointments...
-
Answer the following two independent questions. a. MM Corporation is considering several proposed investments for the coming budget year. MM produces electrical apparatus for industrial complexes....
-
Johnny Wong had purchased a dilapidated apartment block, The Empress, 20 years ago for $220,000. At the time, the purchase price had been allocated $80,000 to the land and $140,000 to the building....
-
Strip Limited has received an offer from an unrelated corporation, Corporate Raider Inc., to purchase all of Strip's common shares in a wholly owned subsidiary, Profits Galore Ltd. All three...
-
For each of the following items, identify the appropriate provision of the Act which deals with the item listed. Be as specific as possible in citing the reference to the Act, i.e., Part, Division,...
-
At the beginning of the financial year on 1 April 19X5, a company had a balance on plant account of 372,000 and on provision for depreciation of plant account of 205,400. The companys policy is to...
-
The following balance sheets were drawn up as at 31 December \(19 \times 7\). The person drafting the balance sheet of P Ltd was not too sure of an item and has shown it as a suspense amount. P...
-
A The following balance sheets of P Ltd and S Ltd were drawn up as at 31 December 19X4. Draw up the consolidated balance sheet as at that date. P Balance Sheet as at 31 December 19X4 Investment in...
Study smarter with the SolutionInn App