Thompson Enterprises Ltd. has taxable income of $100,000 before deducting CCA and taking account of the...
Thompson Enterprises Ltd. has taxable income of $100,000 before deducting CCA and taking account of the following transactions.
1) Sold land for proceeds of $300,000. Thompson paid a 5% real estate commission on this sale. The land had an adjusted cost base of $175,000. Assume a capital gains inclusion rate of 50%.
2) Purchased class 8 assets (CCA rate of 20%) for a total cost of $50,000. Sold class 8 assets, which had an original capital cost of $40,000, for proceeds of $30,000. The opening balance of the class 8 UCC pool was $200,000.
3) Sold all of the assets in the class 10 pool (CCA rate of 30%) for proceeds of $50,000. These assets had an original cost of $60,000. The opening balance of the class 10 UCC pool was $40,000.
Determine the impact that each of the above-noted items will
have on Thompson’s taxable income and calculate Thompson’s total
taxable income for the year.
Please find answers for each section, 1, 2 , and 3 and then add
together to find the total taxable income for the year.
Homework Answers
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Thompson Enterprises Ltd. has taxable income of $100,000 before
deducting CCA and taking account of the...
Taxation rules of Alberta Canada. ACTIVITY 4: Recapture Example Two assets in class 8 (20%) with...
Taxation
rules of Alberta Canada.
ACTIVITY 4: Recapture Example Two assets in class 8 (20%) with an original cost of $50,000 each. Opening UCC for the class is $36,864. (a) Sell One Asset For $40,000. What is the tax consequence of this sale? (b) Sell One Asset For $60,000. What are the tax consequences of this sale? 1/2 Year Rule Subject to CCA Class No. UCC Additions Disposals Balance Rate % CCA UCC
Question 2 Ms. Gold has been investing in real estate for almost half a century. On...
Question 2 Ms. Gold has been investing in real estate for almost half a century. On January 1, 2018, she owned four rental properties and the relevant facts on these properties are as follows: 112 Bay Street This is a Class 3 building that has a capital cost of $850,000. Its UCC at the beginning of the year was $627,000. During the year, it generated rent of $81,000 and incurred property taxes of $10,500, interest charges of $13,000, and other...
A company is considering selling one of its two factories used in its business in Canada....
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Q2. (25 marks) Calculate depreciation and CCA On July 2, 2019, Vicuna Inc. purchased equipment for...
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On July 2, 2019, Vicuna Inc. purchased equipment for $720,000. This equipment has an estimated useful...
On July 2, 2019, Vicuna Inc. purchased equipment for $720,000. This equipment has an estimated useful life of six years and an estimated residual value of $30,000. Depreciation is taken for the portion of the year the asset is used. The asset is a Class 8 asset with a maximum CCA rate of 20%. Vicuna has a December year end. Instructions a) Complete the schedule below by determining the depreciation expense/CCA and year-end book values/UCC for 2019 and 2020 using...
For the year ended December 31, 2020, Sweet Ltd. reported income before income taxes of $190,500. Prior to 2020 taxable...
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PLEASE DO ON WORD DOCUMENT. THANK YOU. Section B - Multiple Choice Where a calculation is...
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(1pts) 4) Kirby, a single taxpayer, has taxable income of $40,000 and is in the 12%...
(1pts) 4) Kirby, a single taxpayer, has taxable income of $40,000 and is in the 12% tax bracket. During 2020, she had the following capital asset transactions: $11,000 10,000 2,000 Long-term gain from the sale of a coin collection Long-term gain from the sale of a land investment Short-term gain from the sale of a stock investment Kirby's tax consequences from these gains are as follows: a. (5% * $10,000) + (12% x $13,000). b. (12% * $13,000) + (28%...
The Thompson Corporation, a manufacturer of steel products, began operations on October 1, 2019. The accounting...
The Thompson Corporation, a manufacturer of steel products, began operations on October 1, 2019. The accounting department of Thompson has started the fixed-asset and depreciation schedule presented below. You have been asked to assist in completing this schedule. In addition to ascertaining that the data already on the schedule are correct, you have obtained the following information from the company's records and personnel: (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD...
he Thompson Corporation, a manufacturer of steel products, began operations on October 1, 2019. The accounting...
he Thompson Corporation, a manufacturer of steel products, began
operations on October 1, 2019. The accounting department of
Thompson has started the fixed-asset and depreciation schedule
presented below. You have been asked to assist in completing this
schedule. In addition to ascertaining that the data already on the
schedule are correct, you have obtained the following information
from the company's records and personnel: (FV of $1, PV of $1, FVA
of $1, PVA of $1, FVAD of $1 and PVAD...
Taxation
rules of Alberta Canada.
ACTIVITY 4: Recapture Example Two assets in class 8 (20%) with an original cost of $50,000 each. Opening UCC for the class is $36,864. (a) Sell One Asset For $40,000. What is the tax consequence of this sale? (b) Sell One Asset For $60,000. What are the tax consequences of this sale? 1/2 Year Rule Subject to CCA Class No. UCC Additions Disposals Balance Rate % CCA UCC
Q2. (25 marks) Calculate depreciation and CCA On July 2, 2019, Vicuna Inc. purchased equipment for $720,000. This equipment has an estimated useful life of six years and an estimated residual value of $30,000. Depreciation is taken for the portion of the year the asset is used. The asset is a Class 8 asset with a maximum CCA rate of 20%. Vicuna has a December year end. Instructions a) Complete the schedule below by determining the depreciation expense/CCA and year-end...
(1pts) 4) Kirby, a single taxpayer, has taxable income of $40,000 and is in the 12% tax bracket. During 2020, she had the following capital asset transactions: $11,000 10,000 2,000 Long-term gain from the sale of a coin collection Long-term gain from the sale of a land investment Short-term gain from the sale of a stock investment Kirby's tax consequences from these gains are as follows: a. (5% * $10,000) + (12% x $13,000). b. (12% * $13,000) + (28%...
he Thompson Corporation, a manufacturer of steel products, began
operations on October 1, 2019. The accounting department of
Thompson has started the fixed-asset and depreciation schedule
presented below. You have been asked to assist in completing this
schedule. In addition to ascertaining that the data already on the
schedule are correct, you have obtained the following information
from the company's records and personnel: (FV of $1, PV of $1, FVA
of $1, PVA of $1, FVAD of $1 and PVAD...
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