The income statement for Jolly Good Marketing Ltd. is as follows: Jolly Good Marketing Ltd. (JGML) Income
Question:
The income statement for Jolly Good Marketing Ltd. 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 | $53,790 |
NOTE 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 |
In 20X1, JGML disposed of old and worn-out furniture. No proceeds were received as the furniture was disposed of. 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 & 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 & Maintenance
The Repairs & Maintenance expenses of $35,000 include $30,000 expense for upgrading the floor in the lobby. The remainder was for servicing equipment and painting.
NOTE 4: Losses
JGML has the following losses available
NET CAPITAL LOSS | $8,000 | |
NON-CAPITAL LOSS | $12,000 |
These losses were incurred in the prior periods and are available (if applicable) to be used in 20X1.
REQUIRED:
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.
Cornerstones of Financial and Managerial Accounting
ISBN: 978-1111879044
2nd edition
Authors: Rich, Jeff Jones, Dan Heitger, Maryanne Mowen, Don Hansen