XYZ Inc is a Canadian Controlled private corporation. The company's controller has

prepared an income statement for the year for the company(the amounts shown do not

include any applicable HST):

XYZ Inc.

Income Statement

For the Year Ended December31st,2023

Revenue:

Sales $900,000

Other revenue $29,000

Expenses:

Cost of sales $430,000

Salaries and wages $220,000

Amortization $14,000

Legal and accounting $10,000

Insurance $20,000

Lease on commercial building $50,000

Golf green fees $9,000

Meals and entertainment $8,000

Net income before taxes $168,000

Additional information(amounts exclude any applicable HST):

The depreciable assets currently on the balance sheet include a van, furniture and

fixtures, and small tools. The undepreciated capital cost(UCC)balances at the end of

the previous taxation year were $15,000(Class10.1),$8,000(Class8)and $0(Class

12).

During2023,new furniture and fixtures were acquired for $32,000.Old fixtures originally

costing $15,000were sold off for proceeds of $2,000.Small tools with an aggregate

cost of $4,500were sold off for proceeds of $1,000.For accounting purposes, the net

book values of the fixtures and small tools matched the sale proceeds, so there is no

gain or loss recognized in the income statement.

Other revenue consisted of interest on bonds($6,000),gain on the sale of short-term

marketable securities($20,000),and eligible dividends($3,000).

All of the expenses were incurred to earn the sales revenue.

XYZ is registered for HST and carries on commercial activity. XYZ operates in Ontario

where the HST rate is13%.XYZ is an annual filer and uses the general method for

determining its HST remittances.

Required

1)Determine XYZ's net income for tax purposes for2023.

2)Determine XYZ's HST remittance or refund for2023.

You must show all your work and provide a brief explanation for anything you've

intentionally omitted from the calculations. No marks will be given for unexplained

omissions.

Answer rating: 100% (QA)

Calculation of Net Income for Tax Purposes Net income before taxes 168000 Add Nondeductible expenses ... View the full answer