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For the year ended August 3 1 , 2 0 2 2 , Zefer Ltd . , a Canadian - controlled private corporation, reported a
For the year ended August Zefer Ltd a Canadiancontrolled private corporation, reported a net income before income taxes of $ The statement of income is summarized as follows: Income from operations Other income: Interest Net gain on sale of assets Net Income per Financial Statements $ $ The net gain on the sale of assets consists of the following amounts: Gain on sale of franchise $ The franchise to operate a retail store was acquired seven years previously at a cost of $ It was sold in for $ The sale proceeds included a cash down payment of $ with the balance payable in six annual instalments of $ plus interest beginning in The franchise, which qualified as a class asset, had an undepreciated capital cost of $ at the time of the sale and was the only asset in its class. Gain on sale of warehouse property $ In July a warehouse property was sold for cash proceeds of $land $; building $ The property had an original cost of $land $; building $ The building, which was the only asset in Class had an undepreciated capital cost of $ After the sale of the warehouse, temporary premises were leased until a new, larger warehouse was constructed. New land was purchased in January for $ Construction of the new warehouse would be completed by July Loss on sale of shares of subsidiary $ Zefer sold shares of a subsidiary corporation for cash proceeds of $ The shares were acquired five years ago for $ Legal fees of $ were paid to draw up the sale agreement and were charged to the legal expense account. Required: Calculate Zefer's net income for tax purposes for the taxation year.$ Paragraph b Capital gains & capital losses Franchise Taxable capital gain Taxable capital gain on sale of land Allowable capital loss on shares Net Income for tax purposes
For the year ended August Zefer Ltd a Canadiancontrolled private corporation, reported a net income before income taxes
of $ The statement of income is summarized as follows:
Income from operations
Other income:
Interest
Net gain on sale of assets
Net Income per Financial Statements
$
$
The net gain on the sale of assets consists of the following amounts:
Gain on sale of franchise $
The franchise to operate a retail store was acquired seven years previously at a cost of $ It was sold in for $ The
sale proceeds included a cash down payment of $ with the balance payable in six annual instalments of $ plus interest
beginning in The franchise, which qualified as a class asset, had an undepreciated capital cost of $ at the time of the
sale and was the only asset in its class.
Gain on sale of warehouse property $
In July a warehouse property was sold for cash proceeds of $land $; building $ The property had
an original cost of $land $; building $ The building, which was the only asset in Class had an
undepreciated capital cost of $ After the sale of the warehouse, temporary premises were leased until a new, larger
warehouse was constructed. New land was purchased in January for $ Construction of the new warehouse would be
completed by July
Loss on sale of shares of subsidiary $
Zefer sold shares of a subsidiary corporation for cash proceeds of $ The shares were acquired five years ago for $
Legal fees of $ were paid to draw up the sale agreement and were charged to the legal expense account.
Required:
Calculate Zefer's net income for tax purposes for the taxation year.$
Paragraph b Capital gains & capital losses
Franchise Taxable capital gain
Taxable capital gain on sale of land
Allowable capital loss on shares
Net Income for tax purposes
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