Modules 5, 6. and 7 are designated as SSM. PURPOSE: Modules 5(CCA), 6(Business Income), and 7(Corporate Taxable Income) are set as Self-Study Modules as per the Course Outline. Assignment Marks No: I Module 5 Capital Cost Allowance (CCA) 1 : : Ni cl l 6 i NetlncomeforTai-t Purposes i 2 l ' o ue NIFI'lBusinesslncome) = i i Module? i Corporate Tax i 3 INSTRUCTIONS: ( 1] Assignment 1, 2, and 3 should be completed in good form in an Excel Workbook. (2] Due Dates for SSM assignments are stated (posted) in the Course Schedule. (3] On due dates, you will submit the completed assignment in the respective folders inD2L SSM 5 (CCA) SSM 6 NIFTP (Buss) SSM 7: Corporate Tax gum (CCA) Requires a CCA Schedule in good form. You can either use the CRA's Schedule 8 or the horizontal Excel format as provided to you as a template. M (Net Business Income) Requires a Reconciliation Schedule in good form. You can CRA Schedule 1 or Schedule 1 Excel tab that has been provided to you. M (Corporate TEX) Requires a schedule detailing calculation of the corporation's taxable income in a good form. You can use the Excel Template that has been provided to you. Page 2 of 3 The income statement for Jolly Good Marketing Lid., is as follows: + JOLLY GOOD MARKETING LTD. ("JGML") INCOME STATEMENT ENDING OCTOBER 31, 20X1 Sales Revenue $625,000 Less: Cost of Goods Sold 230,000 Gross Profit $395,000 Operating Expenses: Salaries and Wages $127,000 Property taxes 24,000 Amortization expense (see Note 1) 48,000 Charitable donations 4,800 Recreation club membership fees 14,400 Meals and Entertainment (see Note 2) 29,000 Repairs and Maintenance (see Note 3) 35,000 Other operating expenses 67,000 349,200 Operating income $45,800 Other revenue and expenses: Gain on sale of equipment $12,000 Loss on sale of furniture (4,000) Interest revenue 2,450 Dividends from taxable Canadian corporations 6,300 16,750 Income before taxes $62,550 Income tax expense 8,760 INCOME AFTER TAXES $53,790NOTE 1: Assets Assets Cost NBV UCC Land $750,000 $750,000 Building $625,000 $531,250 $553,000 Furniture and equipment $376,000 $264,000 $212,000 Delivery vans $254,000 $186,000 $124,000 INTRODUCTION TO TAXATION Self-Study Modules (SSM) 5,6, & 7 Page 3 of 3 In 20X1, JGML disposed of old and worn-out furniture. No proceeds were received as the furniture was disposed. The original cost of the disposed furniture was $4,000. In 20X1, JGML sold equipment for $61,000. The original purchase price of the sold equipment was $49,000. In 20X1, JGML purchased new equipment and furniture for $63,000.NOTE 2: Meals 3: Entertainment Meals and Entertainment expenses of $29,000 included $1 ,000 for the JGML Christmas party. The remainder was spent while entertaining clients. NOTE 3: Repairs 8: Maintenance The Repairs & Maintenance expenses of $35,000 includes $30,000 expense for upgrading the floor in the lobby. The remainder was for servicing equipment and painting. NOTE ll: Losses JGML has the following losses available 'NET CAPITAL LOSS $8,000 ' i-NON CAPITAL LOSS $12,000 These losses were incurred in the prior periods and are available (if applicable) to be used' In 20X'l. REQUIRED: ASSIGNMENT 1: CCA Schedule Using an Excel workbook, prepare the CCA schedule in good form for JGML You may use the vertical format as in the textbook or the Excel template provided to you. Alternatively, you can use CRA's Schedule 8. ASSIGNMENT 2: Reconciliation Schedule Using an Excel workbook, prepare the Reconciliation Schedule in good form for JGML. For example, for format see SSP 6-11 Solution on page 8-128 in the Study Guide. ASSIGNMENT 3: Taxable lncorne and Loss Carryover Amounts Using an Excel workbook, showing your work, calculate JGML's taxable income and the remaining balances in their loss carryover pools