Mercado Adventure Sports has prepared the following Income Statement in accordance with generally accepted accounting principles. Mercado Adventure Sports Income Statement January 1, 2017 to December 31, 2017 Sales Less: Cost of Goods Sold Gross Profit Less: Advertising Expense Club Dues Expense Convention Expenses Depreciation Expense Entertainment of Clients Interest Expense Miscellaneous Expenses Rent Expense (Building) Salaries Expense Utilities Expense Net Income before Extra Ordinary Items Gain (Loss) on Disposal of Building Net Income Before Taxes Less: Provision for Income Taxes Net Income for Accounting Purposes $899,660 279,904 $619,756 $18,222 4,500 2,789 12,000 7,447 3,100 4,766 41,000 229,730 6,490 $330,044 $289,712 92,335 $382,047 57,942 $324,104 Additional information: The Club Dues relate to annual membership fees at Divot Golf and Country Club. Mercado Adventure Sports on a regular and continuous basis uses this facility to maintain relationships with existing clients as well as meet new customers. Advertising Expense includes $5,000 paid to a US Broadcaster to entice customers to purchase our products and services: The target of the advertising is the Canadian_Market Interest Expense related to a line of credit used for business activities. Included in the Miscellaneous Expenses was a speeding ticket incurred while delivering $21 0/20 :eed Woodco a client. LHOda ONISOT Z ZMed 20 today apny u ***** ******* Convention Expenses related to the companies owner attending a four day sales convention in Charlottetown, PEI, related to our products and services. The convention expense didn't break out an amount for meals and the entire invoice was recorded as "Convention Expenses" in the accounting records. Salaries expense includes $ 10,000 in bonuses declared on December 31, 2017 that August 2, 2018 were paid on: Assume Mercado Adventure Sports wants to claim the maximum CCA Deduction they are entitled to and have done so in all prior years as well. CEC - Balance on December 31, 2016: 17,725 $32,238 In 2017 Mercado Adventure Sports purchased a Client List for: UCC Balances for January 1, 2017 are as follows: Class 1 (4%) $118,237 (Consisting of One Building Only) Class 8 (20%) 128,735 There was only one depreciable asset disposed of during the year (Building). The accounting journal entry was as follows (Class 1): Cash 222,395 (Net Proceeds on Sale) Loss on Disposal of Building Accumulated Dep'n-Building 17,736 Building 147,796 (Cost of Building) Gain on Disposal of Building During the year, the company acquired the following capital assets 0 92,335 Class 8 (20%) Class 10 (30%) $19,616 $17,781 Mercado Adventure Sports signed a lease for a building on January 1, 2017. Since the original layout didn't work for our operations, we incurred expenses to remodel the building. The lease details are as follows: Cost of Renovations: Lease Term - Yes First Renewal Option - Yrs: Second Renewal Options: $80,048 19 2 1 Required: Using the information below, determine the Net Income for Tax Purposes for Mercado Adventure Sports Show all calculations and prepare a complete CCA schedule for each class. Det the correr dodation in Da Mand The on white con 9) (6 WAN portowed with Mercado mewa anar, 2017 December 2017 10.000 best nec w AMB A Maricamente tone aces 1.2006 12.225 2017 March MO was 10 G yen Othe 400 27 D 12.000 PAL IND ret 20 Cartimary 1, 2017 arest Clau Song 12 The only one tried the marine New dysfoss Cash 122.335 fusson Am 3. 40. + Hit at 44 tr Barone 92.815 B. The theoret 221.710 40 om CA SOS Hefon wone Sona TUS The Gulf Coach Me Asted on the Meral Alloy 1, 2017 Setement www The - Sanche The Man Couto om SR wowo Second in te weet oor Mercado Shows and doch Mercado Adventure Sports has prepared the following Income Statement in accordance with generally accepted accounting principles. Mercado Adventure Sports Income Statement January 1, 2017 to December 31, 2017 Sales Less: Cost of Goods Sold Gross Profit Less: Advertising Expense Club Dues Expense Convention Expenses Depreciation Expense Entertainment of Clients Interest Expense Miscellaneous Expenses Rent Expense (Building) Salaries Expense Utilities Expense Net Income before Extra Ordinary Items Gain (Loss) on Disposal of Building Net Income Before Taxes Less: Provision for Income Taxes Net Income for Accounting Purposes $899,660 279,904 $619,756 $18,222 4,500 2,789 12,000 7,447 3,100 4,766 41,000 229,730 6,490 $330,044 $289,712 92,335 $382,047 57,942 $324,104 Additional information: The Club Dues relate to annual membership fees at Divot Golf and Country Club. Mercado Adventure Sports on a regular and continuous basis uses this facility to maintain relationships with existing clients as well as meet new customers. Advertising Expense includes $5,000 paid to a US Broadcaster to entice customers to purchase our products and services: The target of the advertising is the Canadian_Market Interest Expense related to a line of credit used for business activities. Included in the Miscellaneous Expenses was a speeding ticket incurred while delivering $21 0/20 :eed Woodco a client. LHOda ONISOT Z ZMed 20 today apny u ***** ******* Convention Expenses related to the companies owner attending a four day sales convention in Charlottetown, PEI, related to our products and services. The convention expense didn't break out an amount for meals and the entire invoice was recorded as "Convention Expenses" in the accounting records. Salaries expense includes $ 10,000 in bonuses declared on December 31, 2017 that August 2, 2018 were paid on: Assume Mercado Adventure Sports wants to claim the maximum CCA Deduction they are entitled to and have done so in all prior years as well. CEC - Balance on December 31, 2016: 17,725 $32,238 In 2017 Mercado Adventure Sports purchased a Client List for: UCC Balances for January 1, 2017 are as follows: Class 1 (4%) $118,237 (Consisting of One Building Only) Class 8 (20%) 128,735 There was only one depreciable asset disposed of during the year (Building). The accounting journal entry was as follows (Class 1): Cash 222,395 (Net Proceeds on Sale) Loss on Disposal of Building Accumulated Dep'n-Building 17,736 Building 147,796 (Cost of Building) Gain on Disposal of Building During the year, the company acquired the following capital assets 0 92,335 Class 8 (20%) Class 10 (30%) $19,616 $17,781 Mercado Adventure Sports signed a lease for a building on January 1, 2017. Since the original layout didn't work for our operations, we incurred expenses to remodel the building. The lease details are as follows: Cost of Renovations: Lease Term - Yes First Renewal Option - Yrs: Second Renewal Options: $80,048 19 2 1 Required: Using the information below, determine the Net Income for Tax Purposes for Mercado Adventure Sports Show all calculations and prepare a complete CCA schedule for each class. Det the correr dodation in Da Mand The on white con 9) (6 WAN portowed with Mercado mewa anar, 2017 December 2017 10.000 best nec w AMB A Maricamente tone aces 1.2006 12.225 2017 March MO was 10 G yen Othe 400 27 D 12.000 PAL IND ret 20 Cartimary 1, 2017 arest Clau Song 12 The only one tried the marine New dysfoss Cash 122.335 fusson Am 3. 40. + Hit at 44 tr Barone 92.815 B. The theoret 221.710 40 om CA SOS Hefon wone Sona TUS The Gulf Coach Me Asted on the Meral Alloy 1, 2017 Setement www The - Sanche The Man Couto om SR wowo Second in te weet oor Mercado Shows and doch
