Fuzon Ltd. is a Canadian controlled private corporation. It has been in operation for several years...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Fuzon Ltd. is a Canadian controlled private corporation. It has been in operation for several years and has a December 31 year end. For the taxation year ending December 31, 2020, its Net Income For Tax Purposes was made up of the following components: Active Business Income $423,400 Dividends From Canadian Corporations: 223,600 101,400 Wholly Owned Subsidiary (All Non-Eligible) Portfolio Investments (All Eligible) Canadian Source Interest Taxable Capital Gains [(1/2)($223,500)] 48,300 111,750 Net Income For Tax Purposes $908,450 Dividends paid to Fuzon Ltd. by the wholly owned subsidiary during 2020 did not result in a dividend refund. The wholly owned subsidiary has been allocated one-half of the annual business limit for the small business deduction, with the remainder to be used by Fuzon. At January 1, 2020, Fuzon had the following balanaces: Eligible RDTOH Non-Eligible RDTOH GRIP $ 28,137 111,263 73,400 During 2019, Fuzon Ltd. paid no dividends. For 2019, the ADJUSTED Aggregate Investment Income of Fuzon and its associated subsidiary was $42,000. Their Taxable Capital Employed in Canada was $4,650,000 for 2019. On September 4, 2020, Fuzon paid taxable dividends to its shareholders in the amount of $265,600. It is the policy of the corporation to designate dividends as eligible only to the extent that a refund will be available on their payment. Required: For Fuzon's 2020 taxation year, calculate the following items: A. Federal Part I Tax Payable. B. The refundable portion of Part I Tax Payable C. Part IV Tax Payable. D. The balance in the GRIP account on December 31, 2020. E. The balances in the Eligible RDTOH and the Non-Eligible RDTOH on December 31, 2020. F. The dividend refund, showing separately the amounts refunded on eligible and non-eligible dividends. Fuzon Ltd. is a Canadian controlled private corporation. It has been in operation for several years and has a December 31 year end. For the taxation year ending December 31, 2020, its Net Income For Tax Purposes was made up of the following components: Active Business Income $423,400 Dividends From Canadian Corporations: 223,600 101,400 Wholly Owned Subsidiary (All Non-Eligible) Portfolio Investments (All Eligible) Canadian Source Interest Taxable Capital Gains [(1/2)($223,500)] 48,300 111,750 Net Income For Tax Purposes $908,450 Dividends paid to Fuzon Ltd. by the wholly owned subsidiary during 2020 did not result in a dividend refund. The wholly owned subsidiary has been allocated one-half of the annual business limit for the small business deduction, with the remainder to be used by Fuzon. At January 1, 2020, Fuzon had the following balanaces: Eligible RDTOH Non-Eligible RDTOH GRIP $ 28,137 111,263 73,400 During 2019, Fuzon Ltd. paid no dividends. For 2019, the ADJUSTED Aggregate Investment Income of Fuzon and its associated subsidiary was $42,000. Their Taxable Capital Employed in Canada was $4,650,000 for 2019. On September 4, 2020, Fuzon paid taxable dividends to its shareholders in the amount of $265,600. It is the policy of the corporation to designate dividends as eligible only to the extent that a refund will be available on their payment. Required: For Fuzon's 2020 taxation year, calculate the following items: A. Federal Part I Tax Payable. B. The refundable portion of Part I Tax Payable C. Part IV Tax Payable. D. The balance in the GRIP account on December 31, 2020. E. The balances in the Eligible RDTOH and the Non-Eligible RDTOH on December 31, 2020. F. The dividend refund, showing separately the amounts refunded on eligible and non-eligible dividends.
Expert Answer:
Answer rating: 100% (QA)
A Federal Part I Tax Payable 423400 B The refundable portion of Part I Tax Payable 423400 C Part IV ... View the full answer
Related Book For
Entrepreneurial Finance
ISBN: 978-0538478151
4th edition
Authors: J . chris leach, Ronald w. melicher
Posted Date:
Students also viewed these accounting questions
-
Venus Williams Inc. (VWI) is a Canadian controlled private corporation (CCPC) with a December 31 year end. For the taxation year ending December 31, 2020, its Net income for Tax Purposes was made up...
-
A project has been in operation for 5 years, yielding the following annual cash flows Year Cash Flow 0.................-$103,000 1....................102,700 2....................-87,000...
-
Green Valley Airport has been in operation for several years and is beginning to experience flight congestion. A study of airport operations revealed that planes arrive at an average rate of 12 per...
-
A company estimates that the marginal cost (in dollar per item) of producing x items is 1.73 - 0.004x. if the cost of producing one item is $566, find the cost of producing 100 items. (Round your...
-
TechGeek designs and produces high-tech gadgets that appeal to highly educated men between the ages of 25 and 50. These customers aren't as concerned about price as they are about innovation and...
-
Solve the preceding problem by integrating the differential equation of the deflection curve In preceding problem
-
A sample of five third graders took a reading test. They then participated in a reading improvement program, and took the test again to determine whether their reading ability had improved. Following...
-
Interpreting Bond Yields Suppose you buy a 7 percent coupon, 20-year bond today -when its first issued. If interest rates suddenly rise to 15 percent, what happens to the value of your bond? Why?
-
Intro A project has expected cash flows with a present value of $79.5 million. The annual standard deviation of the project's returns is 60%. If the project does not go well, the company can end it...
-
In July 2006, Tata Motors, an Indian auto maker, and Fiat Auto, an Italian automaker, announced their intention to form a joint venture to produce passenger cars, engines, and transmissions in India....
-
Macy's has decided to hire 1,000 additional sale people from October 1st January 31st to help with the increased holiday traffic in their stores. This is an example of a(n) uncontrollable variable,...
-
Compare the weighted average method with the FIFO method in calculating unit costs.
-
Under what circumstances are identical results obtained under weighted average and FIFO process costing?
-
A firm is engaged in manufacturing jobs of long duration. Examine the detailed procedure suitable for costing purposes.
-
Explain normal and abnormal wastage and state how they should be dealt with in process cost accounts.
-
What is service costing? Describe the type of industries in which such a system would be suitable.
-
The function f is defined by f = {1-1-2 1 x 1 and 1+ log 2 > 1.Then what can we say about the function at x = 1? Ofis continuous but not differentiable at x =1. O Neither continuous nor...
-
Use critical values to test the null hypothesis H0: 1 2 = 20 versus the alternative hypothesis H0: 1 2 20 by setting a equal to .10, .05, .01, and .001. How much evidence is there that the...
-
The venture investors and founders of ACE Products, a closely held corporation, are contemplating merging the successful venture into a much larger diversified firm that operates in the same...
-
What is meant by the weighted average cost of capital (WACC)?
-
Explain how the AFN equation can be used to forecast the amount of funds that will be needed over a several-year period.
-
a. What responsibility does the auditor have when he believes material errors or irregularities may exist? b. What are the possible effects of the foregoing on the auditor's standard report?
-
Watts and Williams, a firm of certified public acccountants, audited the accounts of Sampson Skins, Inc., a corporation that imports and deals in fine furs. Upon completion of the examination the...
-
a. Can an examination made in accordance with generally accepted auditing standards be relied upon to detect illegal acts? Why or why not? b. What are the possible effects of illegal acts on the...
Study smarter with the SolutionInn App