Determine Zazz's minimum Net Income For Tax Purposes and Taxable Income for the year ending December...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Determine Zazz's minimum Net Income For Tax Purposes and Taxable Income for the year ending December 31, 2020. Determine Zazz's federal Tax Payable for the year ending December 31, 2020. Zazz Ltd (Zazz) is a Canadian Controlled Private Corporation. For its fiscal year ending December 31, 2020, Zazz reported net income of $849,200 in accordance with GAAP. It also reported income tax expense of $92,000 that consisted solely of instalment payments. The accountant also provided you with the following information: Most capital assets are rented instead of purchased. However, the company did spend $52,000 on leasehold improvements in 2018 for its store. The lease is for 2 years with 2 optional renewals for 2 years each. • The company sold a warehouse for $533,000. At the start of the year, the warehouse's UCC balance was $390,400 while it had a net book value of $415,000 on the date of sale. The building was purchased for $496,000. ● ● Depreciation expense was $19,400. Zazz sold 1,000 shares in its subsidiary, Kahuna Ltd. (Kahuna) for $50 per share. The shares had an ACB of $20 per share. This reduced Zazz's ownership percentage of Kahuna to 75%. Kahuna is associated with Zazz and has been allocated half of the small business deduction. After Zazz sold Kahuna shares, Kahuna issued $28,400 of non eligible dividends to its shareholders. This allowed Kahuna to receive a refund of its non-eligible RDTOH account of $7,600. Zazz included $5,100 in its revenues from a royalty it purchased in 2017. Zazz purchased a membership in a private dining club for its president. The membership cost $5,500 and the president used it 90% of the time to entertain clients. Meals and entertainment costs were $12,900. The company had a $10,700 net capital loss carryover from 2016 at the start of the year. At the end of the 2019, Zazz's non-eligible RDTOH account was $3,100. No other accounts had a balance at the end of 2019 and no dividends were paid by Zazz in 2019. • During 2020, Zazz paid $80,000 of non-eligible dividends to its shareholders. Determine Zazz's minimum Net Income For Tax Purposes and Taxable Income for the year ending December 31, 2020. Determine Zazz's federal Tax Payable for the year ending December 31, 2020. Zazz Ltd (Zazz) is a Canadian Controlled Private Corporation. For its fiscal year ending December 31, 2020, Zazz reported net income of $849,200 in accordance with GAAP. It also reported income tax expense of $92,000 that consisted solely of instalment payments. The accountant also provided you with the following information: Most capital assets are rented instead of purchased. However, the company did spend $52,000 on leasehold improvements in 2018 for its store. The lease is for 2 years with 2 optional renewals for 2 years each. • The company sold a warehouse for $533,000. At the start of the year, the warehouse's UCC balance was $390,400 while it had a net book value of $415,000 on the date of sale. The building was purchased for $496,000. ● ● Depreciation expense was $19,400. Zazz sold 1,000 shares in its subsidiary, Kahuna Ltd. (Kahuna) for $50 per share. The shares had an ACB of $20 per share. This reduced Zazz's ownership percentage of Kahuna to 75%. Kahuna is associated with Zazz and has been allocated half of the small business deduction. After Zazz sold Kahuna shares, Kahuna issued $28,400 of non eligible dividends to its shareholders. This allowed Kahuna to receive a refund of its non-eligible RDTOH account of $7,600. Zazz included $5,100 in its revenues from a royalty it purchased in 2017. Zazz purchased a membership in a private dining club for its president. The membership cost $5,500 and the president used it 90% of the time to entertain clients. Meals and entertainment costs were $12,900. The company had a $10,700 net capital loss carryover from 2016 at the start of the year. At the end of the 2019, Zazz's non-eligible RDTOH account was $3,100. No other accounts had a balance at the end of 2019 and no dividends were paid by Zazz in 2019. • During 2020, Zazz paid $80,000 of non-eligible dividends to its shareholders.
Expert Answer:
Answer rating: 100% (QA)
Determining Zazzs Taxable Income and Tax Payable for 2020 1 Minimum Net Income for Tax Purposes MNIT... View the full answer
Related Book For
Canadian Income Taxation Planning And Decision Making
ISBN: 9781259094330
17th Edition 2014-2015 Version
Authors: Joan Kitunen, William Buckwold
Posted Date:
Students also viewed these law questions
-
Falko Ltd. is canadian controlled privated corporation with a december31 year end. For its year ending december 31, 2020, its acounting net income before taxes before taxes, as determined using...
-
QUESTION 1 If current interest rates for real estate lending is at 2%, then it would be better to get an adjustable rate mortgage. O True False
-
Niles Wholesale Ltd. (NWL), is a Canadian controlled private corporation that was incorporated fifteen years ago by Ms. Jessenia Niles. Its only business activity is the sale of French sourced...
-
Consider a spherical fluid particle in an inviscid fluid (no shear stresses). If pressure and gravitational forces are the only forces acting on the particle, can they cause the particle to rotate?...
-
When an auditor performed an inventory count at a privately-owned medical supply company, it observed that some of the waste from radioactive isotopes produced at that facility three years appeared...
-
Focus groups are considered to be what type of research?
-
Gladys feske ( ompanj has these comparative balance sheet data Additional inlormalin !1. Net income was $25,000. 2. Sales on account ueie >420.()()(). Sales returns and allowances amounted to...
-
A group of 25,000 design engineers was asked a series of questions concerning the importance of various attributes of a milling machine. The group had the following response to the question: "How...
-
Entries for Investment in Bonds, Interest, and Sale of Bonds Bocelli Co. purchased $84,000 of 5%, 10-year Sanz County bonds on May 11, Year 1, directly from the county, at their face amount plus...
-
From the information in BE5.4, prepare the journal entries to record these transactions on McLeena Companys books under a perpetual inventory system. Data From BE 5.4 Prepare the journal entries to...
-
Discuss the advantages and disadvantages of Network Analysis in business by giving examples. How could it be useful for marketing? Summarize your findings and post it here
-
1. Visit each of the websites above (at these websites - browse around to read about basic methods of exporting a business would analyze when contemplating a new foreign market). 2. Use these...
-
Corporation Z is considering a new project. This project requires an initial cash investment of $70,000. The project will generate cash inflows of $10,500 in the first year. Then, the project will do...
-
1, then what is the value of A3-6A2 + 7A+21. 1 0 2 Q4. If A=0 2 12 0 3 Q5. Evaluate limx-2" x3-4x+4x x-4
-
calculate the the total laibilities and stockholders equity B C 0 1 2 MARTA COMMUNICATIONS, INC. Statement of Retained Earnings For the Month Ended March 31, 20X1 3 Retained Earnings, March 1, 20X1...
-
I'm thinking of building a full service ski resort that would cater to lousy skiers. Your job is to help me determine whether this would be a worthwhile investment. To date, I've already spent $15...
-
Amber Manufacturing provided the following information for last month: Sales---------------------------------------------------------------- $20,000 Variable...
-
Fahrad Inc. sells all of its product on account. Fahrad has the following accounts receivable payment experience: Percent paid in the month of sale .........10 Percent paid in the month after the...
-
Wrap Ltd. is a Canadian-controlled private corporation. At the end of 20X5, Wrap had the following tax account balances: Non-capital losses $ 8,000 Net capital losses (incurred in 20X3) 2,000 ...
-
Not long ago, Colson and Harmantz formed a corporation to carry on a construction business. Each owned 50% of the common shares, which were issued at a nominal cost. In addition, each shareholder...
-
Why is it important for the purchaser of a business to anticipate the post-acquisition organization structure before making the acquisition?
-
Assume that you believe purchasing power parity (PPP) exists. You expect that inflation in Canada during the next year will be 3 percent and inflation in the United States will be 8 percent. Today...
-
(a) Explain the limitations of HCA when prices are rising. (b) Why has the HCA model survived in spite of its shortcomings in times of inflation?
-
To what extent are CCA statements useful to an investor?
Study smarter with the SolutionInn App