APPENDIX

Financial Information for 2018 from accounting records of James Specialty Bike Shop

Assets Cash in bank	$2,300
Accounts Receivable	3,600
Inventory on hand at end of year (Note 1)	20,000
Land (cost)	10,000
Building, net book value (Note 2)	171,433
Truck, net book value (Note 3)	38,500
Tools and Equipment, net book value (Note 4)	47,983
Intangibles - Distributor License (Note 6)	48,000
Liabilities Accounts Payable	$72,500
Bank Loan	58,300
Revenues Motorcycle and Parts Sales	$565,000
Expenses Purchase of inventory	$250,000
Subcontractors-specialty painting	75,000
Local Advertising	2,500
Golf club dues (Note 5)	2,500
Business licences	1,500
Fines and penalties (Note 6)	2,700
Insurance (Note 7)	9,000
Office expenses	1,000
Home Office expenses, not including CCA (Note 8)	2,530
Business phone	2,000
Interest charges (Note 9)	6,950
Salaries (Note 10)	85,000
Employer contributions to CPP and EI	5,586
Depreciation	33,500
Loss on sale of equipment (note 4)	1,500
Property taxes on shop	3,100
Truck Gas & maintenance (Note 11)	7,500
Total Expenses	$491,866

Note 1: The opening inventory on January 1st of the year was $15,000.

Note 2: The building is 3,000 sq.m. located at 124 Main Street, Anytown, Ontario. Half the surface is used as a showroom to sell custom bikes. The rest of the building is used as a shop for mechanic work. The building was constructed on March 1, 2017 at a cost of $185,000. The UCC for tax purposes (class 1) at the beginning of 2018 was $179,450.

Note 4: The tools and equipment are various machines used for the business. Below are further details about each asset:

Description	CCA class	UCC Balance Jan.1, 2018
Customizing machine	class 53	$0
Customizing tools	class 8	$9,000
Computer-assisted design equipment	class 12	$5,000
Computer	class 50	$3,988

Class 53

A new customizing machine was acquired on January 20, 2018 at a cost of

$21,000.

Class 8

Various customizing tools were acquired on March 1, 2017. The cost of all tools together is $10,000. No further tools were acquired or sold in 2017 or 2018.

Class 12

Computer-assisted design (CAD) equipment was acquired on March 1, 2017 at a cost of $10,000. However, during 2018 James decided to replace that CAD equipment because it was not performing well enough for the demands of his business. A new more powerful CAD equipment was purchased on March 1, 2018 at a cost of $28,000. The vendor of the new equipment accepted to take the old equipment in exchange. A trade allowance of $6,000 was received for the old equipment (net book value for accounting purposes was $7,500).

Class 50

Computer hardware was purchased for general office work on March 15, 2017 at a cost of $5,500. No further additions were made in 2017 or 2018.

Note 5: James joined the local golf club to find new customers. The membership cost was $2,500 for the year.

Note 6: In 2018 the business was charged with selling branded motorcycle parts without proper authorization. James signed a new distributorship agreement and agreed to pay a fine of $2,700 for previous unauthorized transactions. James paid $50,000 to obtain a 25-year license effective January 1, 2018.

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