Furniture Focus Limited provides competitive prices to consumers by using a no-frills approach to displaying its product
Question:
For the year ended December 31, 2012, Furniture Focus Limited had the following operating expenses:
Sales $35,000,000
Cost of goods sold (20,000,000)
Gross profit $15,000,000
Selling expenses (5,000,000)
General and administrative expenses (2,000,000)
$ 8,000,000
Other income..................................................... 50,000
Net income.................................................... $ 8,050,000
The general and administrative expenses include $30,000 of interest and $5,000 of property taxes on the vacant land rented to the automobile dealer. There are no other expenses connected with this land. Other income includes $10,000 of rental income paid by the automobile dealer.
REQUIRED
Determine the income tax consequences of the various payments related to the vacant land.
Dealer
A dealer in the securities market is an individual or firm who stands ready and willing to buy a security for its own account (at its bid price) or sell from its own account (at its ask price). A dealer seeks to profit from the spread between the...
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Related Book For
Introduction To Federal Income Taxation In Canada
ISBN: 9781554965021
33rd Edition
Authors: Robert E. Beam, Stanley N. Laiken, James J. Barnett
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