The income statement that has been prepared by Corner Spa Ltd.'s accountant for the current year...

 

  

Transcribed Image Text:

The income statement that has been prepared by Corner Spa Ltd.'s accountant for the current year ending June 30 is as follows: Operating Expenses: Salaries and Wages 118,000 Interest and Property taxes 22,000 Amortization expense (see Note 1) 56,000 Charitable donations 2,700 Life Insurance (see Note 2) Meals and Entertainment (see Note 3) Repairs and Maintenance (see Note 4) Other operating expenses 6,600 31,000 62,000 72,000 370,300 Operating income 99,700 Other revenue and expenses Loss on sale of delivery vans -66,000 Interest revenue 3,300 Gain on sale of shares (Note 5) 10,800 Dividends from taxable Canadian corporations 7,200 -44,700 Income before taxes 55,000 Income tax expense 5,750 Income after taxes 49,250 | Note 1: Spa's assets include: Land Building Furniture and equipment Delivery vans Cost NBV UCC 375,000 375,000 550,000 370,000 325,205 325,000 107,000 95,850 320,000 186,000 133,280 During the year, Spa sold disposed of worn furniture. The original cost was $4,000 and no proceeds were received. Custom equipment with an original cost of $49,000 was sold for $61,000. The equipment and furniture were replaced with new furniture and equipment costing $63,000. Note 2: Spa carries life insurance on the COO to ensure the company can continue until they redeploy personnel or hire a replacement. Note 3: Meals and Entertainment expense included $1,000 for the company Christmas party. The remainder was spent while entertaining clients. Note 4: The major expense ($30,000) was incurred upgrading the flooring in the treatment rooms. The remainder was for servicing equipment and painting. Note 5: Spa has $8,000 in their net capital loss pool, and a $12,000 balance in their non-capital loss carryover pool. Both losses were incurred in the previous fiscal period due to mandated lockdowns. REQUIRED: Assignment 1 Capital Cost Allowance Schedule (CCA): Using an Excel workbook, prepare the CCA schedule in good form for Corner Spa Ltd. The income statement that has been prepared by Corner Spa Ltd.'s accountant for the current year ending June 30 is as follows: Operating Expenses: Salaries and Wages 118,000 Interest and Property taxes 22,000 Amortization expense (see Note 1) 56,000 Charitable donations 2,700 Life Insurance (see Note 2) Meals and Entertainment (see Note 3) Repairs and Maintenance (see Note 4) Other operating expenses 6,600 31,000 62,000 72,000 370,300 Operating income 99,700 Other revenue and expenses Loss on sale of delivery vans -66,000 Interest revenue 3,300 Gain on sale of shares (Note 5) 10,800 Dividends from taxable Canadian corporations 7,200 -44,700 Income before taxes 55,000 Income tax expense 5,750 Income after taxes 49,250 | Note 1: Spa's assets include: Land Building Furniture and equipment Delivery vans Cost NBV UCC 375,000 375,000 550,000 370,000 325,205 325,000 107,000 95,850 320,000 186,000 133,280 During the year, Spa sold disposed of worn furniture. The original cost was $4,000 and no proceeds were received. Custom equipment with an original cost of $49,000 was sold for $61,000. The equipment and furniture were replaced with new furniture and equipment costing $63,000. Note 2: Spa carries life insurance on the COO to ensure the company can continue until they redeploy personnel or hire a replacement. Note 3: Meals and Entertainment expense included $1,000 for the company Christmas party. The remainder was spent while entertaining clients. Note 4: The major expense ($30,000) was incurred upgrading the flooring in the treatment rooms. The remainder was for servicing equipment and painting. Note 5: Spa has $8,000 in their net capital loss pool, and a $12,000 balance in their non-capital loss carryover pool. Both losses were incurred in the previous fiscal period due to mandated lockdowns. REQUIRED: Assignment 1 Capital Cost Allowance Schedule (CCA): Using an Excel workbook, prepare the CCA schedule in good form for Corner Spa Ltd.

Answer rating: 100% (QA)

Calculate the adjustment to the UCC for the furniture and equipment due to the disposal of worn furn... View the full answer