For the year ended December 31, 2020, Paij Enterprises Corp. (PEC), a Canadian-controlled private corporation (CCPC),...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
For the year ended December 31, 2020, Paij Enterprises Corp. (PEC), a Canadian-controlled private corporation (CCPC), provided the following summary income statement (prepared under Canadian accounting standards for private enterprises): Revenues Expenses (excluding taxes) Net income before taxes $575,000 (260.000) $315,000 PEC does NOT have any income from manufacturing or processing activities. PEC is associated with three other CCPCS; this group of four associated companies has agreed to share the annual business limit equally. Other information pertaining to PEC's December 31, 2020, year end is as follows: • Revenues include portfolio dividends from taxable Canadian corporations of $30,000. • Amortization included in the net income calculation was $65,000. Maximum available capital cost allowance (CCA) deductions total $58,000. • Revenues include an accounting gain of $38,000 resulting from the sale of a iong-term investment in shares. The proceeds from the share sale were $100,000 and the adjusted cost base of the shares was $60,000. • Expenses include $1,550 in interest and penalty charges incurred from failing to file last year's tax return and NOT making the required instalment payments within the prescribed period of time. • PEC has a net capital loss carryforward available of $36,000(50% * $72,000). • Assume that PEC's active business income was $323,000 for the year ended December 31, 2020. Required: a) Determine the minimum net income for tax purposes and the taxable income for PEC's year ended December 31, 2020. Indicate the amount and type of any loss carryovers available for use in subsequent years. (5 marks) b) Determine the Part I and Part IV federal tax payable for 2020. (7 marks) For the year ended December 31, 2020, Paij Enterprises Corp. (PEC), a Canadian-controlled private corporation (CCPC), provided the following summary income statement (prepared under Canadian accounting standards for private enterprises): Revenues Expenses (excluding taxes) Net income before taxes $575,000 (260.000) $315,000 PEC does NOT have any income from manufacturing or processing activities. PEC is associated with three other CCPCS; this group of four associated companies has agreed to share the annual business limit equally. Other information pertaining to PEC's December 31, 2020, year end is as follows: • Revenues include portfolio dividends from taxable Canadian corporations of $30,000. • Amortization included in the net income calculation was $65,000. Maximum available capital cost allowance (CCA) deductions total $58,000. • Revenues include an accounting gain of $38,000 resulting from the sale of a iong-term investment in shares. The proceeds from the share sale were $100,000 and the adjusted cost base of the shares was $60,000. • Expenses include $1,550 in interest and penalty charges incurred from failing to file last year's tax return and NOT making the required instalment payments within the prescribed period of time. • PEC has a net capital loss carryforward available of $36,000(50% * $72,000). • Assume that PEC's active business income was $323,000 for the year ended December 31, 2020. Required: a) Determine the minimum net income for tax purposes and the taxable income for PEC's year ended December 31, 2020. Indicate the amount and type of any loss carryovers available for use in subsequent years. (5 marks) b) Determine the Part I and Part IV federal tax payable for 2020. (7 marks)
Expert Answer:
Answer rating: 100% (QA)
a Net Income Revenues 575000 Expenses 260000 Gross income ... View the full answer
Related Book For
Managerial Accounting Tools for Business Decision Making
ISBN: 9781119403999
5th Canadian edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso, Ibrahim M. Aly
Posted Date:
Students also viewed these accounting questions
-
The following data relate to inventory for the year ended December 31, 2009. A physical inventory on December 31, 2009, indicates that 600 units are on hand and that they came from the July 1...
-
The statement of cash flows for the year ended December 31, 2013, for Bronco Metals is presented below. Required: Prepare the statement of cash flows assuming that Bronco prepares its financial...
-
The statement of cash flows for the year ended December 31, 2014, and other data for Bradley Corporation are shown below: Additional data: a. Bradleys Dividends receivable account decreased by $2,000...
-
ABC Company acquired 60,000 shares of DEF Incorporated's 200,000 ordinary shares on January 2, 2019 for P 4,000,000 when the net assets of DEF Incorporated was P 12,000,000. The excess of acquisition...
-
The following data set refers to the number of customers per day at a jewelry kiosk in Christiana Mall during a 20day period: a. Identify the first, second, and third quartiles. b. Determine the...
-
Waterford Specialties Corporation, a clothing manufacturer, has a plant that will become idle on December 31, 2012. John Landry, corpor ate controller, has been asked to look at three options...
-
You are a small manufacturer of specialty medical devices located in Chicago, Illinois, and the market for your product is cardiologists in the United States. Does globalization affect your business?...
-
In the Vista City Hospital of Problem 8, Set 8.1a, suppose that only the bed limits represent flexible goals and that all the goals have equal weights. Can all the goals be met? Problem 8 Vista City...
-
he Hossain Corporation reported the following balance sheet data for 2 0 X 4 and 2 0 X 3 : 2 0 X 4 2 0 X 3 Cash $ 9 4 , 0 2 5 $ 3 1 , 9 5 5 Available - for - sale debt securities ( not cash...
-
A slab of polymer 1.6 cm thick, originally at 30C, is heated between steel plates with a surface temperature of 70C. The density of the solid is 950 kg/m 3 , its thermal conductivity is 0.12 W/m K,...
-
Prove that L(S(t-a)) = e -as
-
___________ refers to the words of a presentation in the context of organizational structure and the supporting information.
-
Can you think of a time when a presentation would have been a more effective channel for delivering a message than an email or a memo? Why do you think it would have been more effective?
-
In what way do security devices act as an incentive to repay ones debts?
-
Distinguish between most-favoured nation treatment and national treatment.
-
___________ occurs when the speaker takes general information (premises) and draws a conclusion from that general information.
-
A company has experienced the following changes in sales, labor, and capital. Calculate the total productivity percentage improvement from year 1 to year 2. Does the total productivity measure make...
-
Suppose the spot and six-month forward rates on the Norwegian krone are Kr 5.78 and Kr 5.86, respectively. The annual risk-free rate in the United States is 3.8 percent, and the annual risk-free rate...
-
For the year ended December 31, 2020, the job cost sheets of DeVoe Company contained the following data: Prepare entries in a job-order cost system and a partial income statement. Other data: 1. Raw...
-
The U.S. Institute of Management Accountants has developed ethical standards for managerial accountants. Explain the importance of business ethics. Instructions Identify the four specific standards.
-
In May 2020, the budget committee of Big Jim Stores assembles the following data for preparing the merchandise purchases budget for the month of June: Prepare a purchases budget and budgeted income...
-
The current price of gold is \(\$ 412\) per ounce. The storage cost is \(\$ 2\) per ounce per year, payable quarterly in advance. Assuming a constant interest rate of \(9 \%\) compounded quarterly,...
-
Complete the second half of the proof of the "forward price formula with carrying cost". To construct the arbitrage, go long one unit of a forward and short one unit spot. To execute the short, it is...
-
Suppose that a continuous-time compounding framework is used with a fixed interest rate \(r\). Suppose that the carrying charge per unit of time is proportional to the spot price; that is, the charge...
Study smarter with the SolutionInn App