ACC642 Taxation Cantax Lab no. 2 Due: Per Instructor ABC MFG Kids Inc. is a manufacturer of ABC. The company's headquarters is in Toronto, Ontario. The year-end is December 31, and Mr. Tony ABC, a Canadian resident, wholly owns the company. The company's unaudited income statement is presented below, along with additional information. ABC MFG Inc. Income Statement for the year ended December 21, 2020. (Unaudited) $2,300,000 $ 500,000 650,000 (252,000) $ 898,000 $ 1,402,000 REVENUE Sales & Other Revenue (see Note) Cost of goods sold Opening inventory Purchases Ending inventory Gross Margin EXPENSES Rent Salaries and benefits Management salaries Employee Benefits Interest on late payment of income taxes Loss on sale of computer equipment (note 2) & entertainment Professional fees Repairs and maintenance Dues and subseription (note 3) Business Insurance Office expenses Qualified charitable donations Marketing Expense Depreciation expense (note 1) $ 200,000 500,000 80,000 95,000 2,500 1,500 Business meals 10,000 5,000 22,000 25,000 17,000 16,000 5,000 12,000 25,000 S1016.000 MacBook Pro ation expense (note 1) 25,000 Net income before tax provision Provision for income taxes (Cdn and Foreign) Net income $1,016,000 $386,000 $50,000 $336,000 Note 1: significant accounting polices The company's financial statements have been prepared in accordance with generally accepted accounting principles. Inventories are valued at the lower of cost and net realizable value. Any adjustments are recorded in the income statement as "adjustment of inventory to market". The company's capital assets are comprised of office furniture and equipment used in the manufacturing and processing of the products they sell. The office equipment is depreciated on a double declining basis at 20%. For income tax purposes the opening balance in the undepreciated capital cost was $175,000 for the small building (class 1-4%), and $30,000 for the office furniture (Class 8). Additions to Building (class 1-4%) during year totaled $35,000. Note 2: Loss on sale of computer equipment During tho voor the commany disnosed of some computer equipment (class 50) with a net -Blackboard-Expiration=1617084000000&X... 2 / 2 100% + : LUCTURAL $35,000 (CAT A LUCE Note 2: Loss on sale of computer equipment During the year, the company disposed of some computer equipment (class 50) with a net book value of $3,500 (cost $10,000, accumulated depreciation of $6,500) for $2,000. For income tax purposes, these are the last items in class 50, with an opening UCC of $3,000. Note 3: Dues and subscriptions Included in dues and subscriptions are annual membership dues paid to Mr. ABC MFG's country club for $10,000. Other information: 1. The company has unused non-capital losses from the year 2010 year-end of $10,000, and from the year 1982 year-end of $ 30,000. (hint enter Business Loss Carry forward on Schedule 4, Line 102 2. Included in other Revenues: was Dividends (Eligible) received from a Canadian Corporation (non-connected) for $10,000. Also received a $5,000 dividend (non-eligible) from anottier Canadian Connected Company (80% ownership, connected company received a $2.000 dividend refund this year.) Interest Earned from a CDN bank was $20.000. Interest Earned from a USA Bank was en $10,000 before USA Tax of cdr $1.000.Chint: process non-business Foreign Tax Creditsee Line 632) 100 3. ABC MFG also paid out Dividends (non-eligible) for $30,000 and had a Non-Eligible RDTOH opening balance of $100,000. Eligible RDTOH Opening Balance was $0. Required: Use CANTAX software and prepare the corporation's income tax return for the year ended December 31, 2020 All schedules listed below should also be attached. Please add your name to the corporation's name c.g. ABC MFG Inc. (Student Name). ACC642 Taxation Cantax Lab no. 2 Due: Per Instructor ABC MFG Kids Inc. is a manufacturer of ABC. The company's headquarters is in Toronto, Ontario. The year-end is December 31, and Mr. Tony ABC, a Canadian resident, wholly owns the company. The company's unaudited income statement is presented below, along with additional information. ABC MFG Inc. Income Statement for the year ended December 21, 2020. (Unaudited) $2,300,000 $ 500,000 650,000 (252,000) $ 898,000 $ 1,402,000 REVENUE Sales & Other Revenue (see Note) Cost of goods sold Opening inventory Purchases Ending inventory Gross Margin EXPENSES Rent Salaries and benefits Management salaries Employee Benefits Interest on late payment of income taxes Loss on sale of computer equipment (note 2) & entertainment Professional fees Repairs and maintenance Dues and subseription (note 3) Business Insurance Office expenses Qualified charitable donations Marketing Expense Depreciation expense (note 1) $ 200,000 500,000 80,000 95,000 2,500 1,500 Business meals 10,000 5,000 22,000 25,000 17,000 16,000 5,000 12,000 25,000 S1016.000 MacBook Pro ation expense (note 1) 25,000 Net income before tax provision Provision for income taxes (Cdn and Foreign) Net income $1,016,000 $386,000 $50,000 $336,000 Note 1: significant accounting polices The company's financial statements have been prepared in accordance with generally accepted accounting principles. Inventories are valued at the lower of cost and net realizable value. Any adjustments are recorded in the income statement as "adjustment of inventory to market". The company's capital assets are comprised of office furniture and equipment used in the manufacturing and processing of the products they sell. The office equipment is depreciated on a double declining basis at 20%. For income tax purposes the opening balance in the undepreciated capital cost was $175,000 for the small building (class 1-4%), and $30,000 for the office furniture (Class 8). Additions to Building (class 1-4%) during year totaled $35,000. Note 2: Loss on sale of computer equipment During tho voor the commany disnosed of some computer equipment (class 50) with a net -Blackboard-Expiration=1617084000000&X... 2 / 2 100% + : LUCTURAL $35,000 (CAT A LUCE Note 2: Loss on sale of computer equipment During the year, the company disposed of some computer equipment (class 50) with a net book value of $3,500 (cost $10,000, accumulated depreciation of $6,500) for $2,000. For income tax purposes, these are the last items in class 50, with an opening UCC of $3,000. Note 3: Dues and subscriptions Included in dues and subscriptions are annual membership dues paid to Mr. ABC MFG's country club for $10,000. Other information: 1. The company has unused non-capital losses from the year 2010 year-end of $10,000, and from the year 1982 year-end of $ 30,000. (hint enter Business Loss Carry forward on Schedule 4, Line 102 2. Included in other Revenues: was Dividends (Eligible) received from a Canadian Corporation (non-connected) for $10,000. Also received a $5,000 dividend (non-eligible) from anottier Canadian Connected Company (80% ownership, connected company received a $2.000 dividend refund this year.) Interest Earned from a CDN bank was $20.000. Interest Earned from a USA Bank was en $10,000 before USA Tax of cdr $1.000.Chint: process non-business Foreign Tax Creditsee Line 632) 100 3. ABC MFG also paid out Dividends (non-eligible) for $30,000 and had a Non-Eligible RDTOH opening balance of $100,000. Eligible RDTOH Opening Balance was $0. Required: Use CANTAX software and prepare the corporation's income tax return for the year ended December 31, 2020 All schedules listed below should also be attached. Please add your name to the corporation's name c.g. ABC MFG Inc. (Student Name)