ABC Inc Statement of Income For the period October 1, 2018 to September 30, 2019 Revenue $15,800,000 Operating Expenses Rent 1,350,000 Advertising expense 1,105,000 Bad Debts 179,000 Salaries and wages 3,800,000 Interest 3,150,000 Accounting and legal 195,000 Meals and entertainment 1,300,000 Amortization 750,000 Repairs and maintenance 500,000 Automotive 2,120,000 Net Income from Operations 1,351,000 Gain on disposal of asset 350,000 Net income before taxes 1,701,000 Income Taxes 635,000 Net Income $1,066,000 Additional Information relating to the preparation of the statement of income for the period Legal fees of $120,000 were accrued at September 30, 2019 to reflect an estimate of potential legal fees for a threatened lawsuit against the company The company paid XYZ Advertising Inc a total of $600,000 for advertising services for the period It was decided that $243,000 be expensed in the current period and the remaining amount be capitalized as the company will benefit from this outlay in the following year Included in salaries and wages is a bonus accrual to the shareholder in the amount of $1,250,000 This amount was paid to the shareholder with appropriate source deductions (Income tax, CPP) on March 30, 2020 Included in interest expense is $23,500 of interest paid to CCRA for late tax installments Included in repairs and maintenance is an accrual of $185,000 that represents potential warranty work for defective items sold Automotive expenses consists of company owned and or leased vehicles provided to employees of the company to perform their employment duties During the period the company sold its land and building and moved into rental space The company received $1,900,000 for the sale of the land and building The land and building had an original cost of $350,000 and $950,000, respectively The undepreciated capital cost (UCC) of the building at October 1, 2018 was $949,000 For the period, the company is eligible to claim CCA of $340,000 on assets in various classes

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Posted on Aug 08, 2024

ABC Inc.

Statement of Income

For the period October 1, 2018 to September 30, 2019

Revenue $15,800,000

Operating Expenses:

Rent 1,350,000

Advertising expense 1,105,000

Bad Debts 179,000

Salaries and wages 3,800,000

Interest 3,150,000

Accounting and legal 195,000

Meals and entertainment 1,300,000

Amortization 750,000

Repairs and maintenance 500,000

Automotive 2,120,000

Net Income from Operations 1,351,000

Gain on disposal of asset 350,000

Net income before taxes 1,701,000

Income Taxes 635,000

Net Income $1,066,000

Additional Information relating to the preparation of the statement of income for the period:

Legal fees of $120,000 were accrued at September 30, 2019 to reflect an estimate of potential legal fees for a threatened lawsuit against the company.
The company paid XYZ Advertising Inc. a total of $600,000 for advertising services for the period. It was decided that $243,000 be expensed in the current period and the remaining amount be capitalized as the company will benefit from this outlay in the following year.
Included in salaries and wages is a bonus accrual to the shareholder in the amount of $1,250,000. This amount was paid to the shareholder with appropriate source deductions (Income tax, CPP) on March 30, 2020.
Included in interest expense is $23,500 of interest paid to CCRA for late tax installments.
Included in repairs and maintenance is an accrual of $185,000 that represents potential warranty work for defective items sold.
Automotive expenses consists of company owned and or leased vehicles provided to employees of the company to perform their employment duties.
During the period the company sold its land and building and moved into rental space. The company received $1,900,000 for the sale of the land and building. The land and building had an original cost of $350,000 and $950,000, respectively. The undepreciated capital cost (UCC) of the building at October 1, 2018 was $949,000.
For the period, the company is eligible to claim CCA of $340,000 on assets in various classes.