ABC Inc. has just completed its 2021 taxation year ending December 31, 2021. Using ASPE, the accountant has determined that the Company has experienced a business loss of $120,000 before income taxes. The accountant provides the following information that was used in the determination of the net accounting loss:

Instructions:

For each "question", provide the effect on the reconciliation of Net Loss for Accounting Purposes

to minimum Net Business Income/Loss for Tax Purposes.

QUESTION 11

The Company expensed $6,500 for country club memberships for their top executives.

1 points

QUESTION 12

The Company has a balance in Class 13 that relates to a single lease that commenced on January 1, 2020. The lease term is 3 year(s) with no renewal options specified. Expenditures on this leasehold were $10,100 in 2020. There have not been any further expenditures. The write-off of these expenditures for accounting purposes is included in Amortization Expense.

4 points

QUESTION 13

The Company has a separate Class 1 balance of $1,926,000 at the end of 2020. This balance relates to a single office building that was purchased in a prior year for $3,182,000. During the year, the company renovated the building at a cost of $81,000. This building is eligible for the enhanced Class 1 rate of 6%.

4 points

QUESTION 14

The company spent $3,600 on advertising in a foreign magazine. The ads were targeting Canadian customers in an ethnic neighbourhood where the foreign magazine is very popular.

1 points

QUESTION 15

During 2021, the Company acquired a competing business at a price that included goodwill of $13,300. For accounting purposes, there has been no impairment or write-down of the goodwill since its purchase. The Company does not own any other intangible property.

3 points

QUESTION 16

The Company's expenses included a total amount of $11,400 for business meals and entertainment.

1 points

QUESTION 17

At the end of 2020, the Company had a separate Class 1 UCC balance of $2,884,000 for a factory that they own. This building is eligible for the enhanced Class 1 rate of 10% for Manufacturing and Processing Buildings. The original capital cost of the building was $4,810,000. There are no substantial changes to the factory building during 2021.