Tax Return Preparation Exercise
	Exercise Assumptions
	Income Statement for the Corporation
	For Year Ended 31 March 2023
	Sales		11,800,000
	Cost of sales		5,400,000
	Gross profit/loss		6,400,000
	Non-operating income:
	Interest from Canadian bonds		218,000
	Dividends from Canadian corporations		292,000
	Dividends from non-affiliated foreign corporations		363,000
	Total non-operating income		873,000
	Operating expenses:
	Advertising		95,000
	Event tickets		67,000
	Depreciation - PP&E		160,000
	Amortization - intangible assets		33,000
	Insurance		87,000
	Interest expense		7,300
	Bank charges		3,800
	Business taxes		13,000
	Office stationery and supplies		1,700
	Legal fees		16,000
	Consulting fees		34,000
	Salaries - management		500,000
	Salaries - other employees		2,600,000
	Supplies		117,000
	Property taxes		39,500
	Utilities		24,000
	Total operating expenses		3,798,300
	Net profit		3,474,700
	Balance Sheet for the Corporation
	As of 31 March 2023
	Cash		460,000
	Accounts receivable	2,300,000
	Allowance for doubtful accounts	(118,000)	2,182,000
	Interest receivable		18,600
	Inventory		4,300,000
	Investments in Canadian corporations		200,000
	Investments in Canadian bonds		120,000
	Investments in other Canadian instruments		45,000
	Investments in foreign corporations		33,000
	Accrued investment income		11,000
	Taxes recoverable/refundable		0
	Total current assets		7,369,600
	Land		2,300,000
	Buildings	17,000,000
	Accumulated amortization of buildings	(8,000,000)	9,000,000
	Machinery, equipment, furniture, and fixtures	4,500,000
	Accumulated amortization of M&E and F&F	(1,000,000)	3,500,000
	Intangible assets	840,000
	Accumulated amortization of intangible assets	(265,000)	575,000
	Total property, plant and equipment		15,375,000
	Total assets		22,744,600
	Amounts payable and accrued liabilities		2,300,000
	Taxes payable		400,000
	Other current liabilities		110,000
	Long-term liabilities		944,000
	Total liabilities		3,754,000
	Common shares		5,000,000
	Preferred shares		2,000,000
	Contributed and other surplus		4,500,000
	Retained earnings/deficit		7,490,600
	Total shareholder equity		18,990,600
	Total liabilities and shareholder equity		22,744,600
	Notes:
	1a Event tickets includes $19,000 in customer entertainment
	1b Event tickets includes $10,000 for a political contribution event
	2 Interest expense was paid on short-term debt
	3 CCA for buildings for the year is $120,000
	4 CCA for machinery, equipment, furniture, and fixtures is $49,000
	5 CCA for intangible assets is $14,000
	6 During the year the corporation paid tax instalments of $220,000
	7a Inventory at the beginning of the year was $5,900,000
	7b Purchases/cost of materials during the year was $3,800,000.

Based on the given assumptions, please help me fill out the Schedule 125 of Canadian CRA.

Schedule 125

Income Statement Information (2010 and later tax years)

Use this schedule to report your income statement information. For more information, see Guide RC4088, General Index of Financial Information (GIFI) and T4012, T2 Corporation - Income Tax Guide.If you need more space, attach additional schedules.

Schedule 125

Code 1005

Protected B

when completed

Corporation's name

Business number

Tax year-end Year Month Day

0001Operating name

0002Description of the operation

0003Sequence number*

Non-farming revenue

Field Code Amount

**8299

Non-farming expenses Cost of Sales

Field Code Amount

Non-farming expenses Operating Expenses

Field Code Amount

**9368

**9369

* See page 3 of this schedule for information on field code 0003. ** Complete this field code if you are reporting non-farming revenue or non-farming expenses.

T2 SCH 125 E (23) (Ce formulaire est disponible en franais.)

Page 1 of 4

Statement Information-continued

Protected Bwhen completed

Farming revenue
Field Code	Amount
*9659

Farming expenses - continued
Field Code	Amount
*9898
*9899
**9970

Extraordinary items and income taxes
Field Code	Amount
**9999

Farming expenses
Field Code	Amount

Other comprehensive income
Field Code	Amount
***9998

* Complete this field code if you are reporting farming revenue or farming expenses. ** Complete this field code for all corporations.

*** If you used the International Financial Reporting Standards, you may have to report amounts under "Other comprehensive income."

Summary Statement (2010 and later tax years)

Use this section of the scheduleonlyto report the summary statement when you are submitting supplementary income statements.For information on supplementary income statements, see Guide RC4088, Appendix B - Reporting multiple lines of business. If you need more space, attach additional schedules.

Page 2 of 4

Schedule 140

Field Code	Amount
****9970

Extraordinary items and income taxes
Field Code	Amount
****9999

**** Complete this field code.