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ch Study Guide-Assignment Sales revenue Direct contracting General and administrative Salary to pou c Meals and entertainment (Note) Advertising expenses Note) Travelling expense Note) Interest

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ch Study Guide-Assignment Sales revenue Direct contracting General and administrative Salary to pou c Meals and entertainment (Note) Advertising expenses Note) Travelling expense Note) Interest and bank charges (Noted) Amortation (Note) Omice expenses... TRO RO 5.000 Total expenses... . . . . $ 121,400 Net operating profil Other Gain on sale of real estate (Note Sale of design contracts (Note Net income ....... .... $ 55.000 19.000 . ..3 196,400 Gruny informed you that there was one unrecorded receivable of $14,500 for a renovation project completed on July 30 Notes: (a) Meals and entertainment includes: Club dues............. Promotional meals and season hockey tickets 3 1,800 10,400 Total ... ... $12.200 (b) Advertising expenses include: Charitable donations......... Community promotion ...... Local advertising and mail outs. $2,200 650 2,050 Total ......... (c) Travelling expense includes both air travel and travel reimbursement to employees for business travel. The company's policy is to reimburse employees 58 cents per kilometre for the business use of their automobiles. The employees drove less than 5,000 kilometres. 106 $ 9,400 8,100 as corporate tax 500 prior years (d) Inter and a chance $18,000 Party interesse for later Total raight-line method of amortization. The maximum capital cost allow many purchased two homes. After Ginny redecorated, the corporation a profit. The corporation has sold six homes in the last two years using the (e) The c ares the straight-line method of amart ance that may be claimed is $8,000 ( During the year, the company purchased two sold the homes for a profit. The corporation has sol same strategy The sale of design contracts result capital gain. of design contracts resulted from Ginny's desire to downscale her involvement in trial design. The gain on sale is net of all costs and expenses and is considered to be a The salary to Ginny's spouse is considered reasonable because he spends most of his working day administering her business. The controller of Source Renovation Ltd. has asked you to calculate the company's income from a from a business for tax purposes. ITA: 18 78(4) ch Study Guide-Assignment Sales revenue Direct contracting General and administrative Salary to pou c Meals and entertainment (Note) Advertising expenses Note) Travelling expense Note) Interest and bank charges (Noted) Amortation (Note) Omice expenses... TRO RO 5.000 Total expenses... . . . . $ 121,400 Net operating profil Other Gain on sale of real estate (Note Sale of design contracts (Note Net income ....... .... $ 55.000 19.000 . ..3 196,400 Gruny informed you that there was one unrecorded receivable of $14,500 for a renovation project completed on July 30 Notes: (a) Meals and entertainment includes: Club dues............. Promotional meals and season hockey tickets 3 1,800 10,400 Total ... ... $12.200 (b) Advertising expenses include: Charitable donations......... Community promotion ...... Local advertising and mail outs. $2,200 650 2,050 Total ......... (c) Travelling expense includes both air travel and travel reimbursement to employees for business travel. The company's policy is to reimburse employees 58 cents per kilometre for the business use of their automobiles. The employees drove less than 5,000 kilometres. 106 $ 9,400 8,100 as corporate tax 500 prior years (d) Inter and a chance $18,000 Party interesse for later Total raight-line method of amortization. The maximum capital cost allow many purchased two homes. After Ginny redecorated, the corporation a profit. The corporation has sold six homes in the last two years using the (e) The c ares the straight-line method of amart ance that may be claimed is $8,000 ( During the year, the company purchased two sold the homes for a profit. The corporation has sol same strategy The sale of design contracts result capital gain. of design contracts resulted from Ginny's desire to downscale her involvement in trial design. The gain on sale is net of all costs and expenses and is considered to be a The salary to Ginny's spouse is considered reasonable because he spends most of his working day administering her business. The controller of Source Renovation Ltd. has asked you to calculate the company's income from a from a business for tax purposes. ITA: 18 78(4)

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