For the year ending December $31,2023,$ the Income Statement of GBC Ltd$.,$ prepared in accordance with

generally accepted accounting principles, is as follows:

Revenues $$880,000$

Expenses:

Cost of Goods Sold $($$$240,000)$

Selling and Administrative Costs $(95,000)$

Amortization Expense $(152,000)$

Other Expenses $(138,000)(625,000)$

Income Before Tax Expense $$255,000$

Income Tax Expense:

Current $($$ $92,000)$

Future $(27,000)(119,000)$

Net Income $$136,000$

Other Information:

$1.$ The Company spent $$6,800$ during the year on landscaping for its new building. For accounting

purposes this was treated as an asset. The Company will not amortize this balance as it believes the

work has an unlimited life.

$2.$ Selling and Administrative Costs include $$15,000$ in business meals and entertainment.

$3.$ Selling and Administrative Costs include membership fees for several employees in a local golf and

country club. These fees total $$3,600.$

$4.$ Other Expenses include contributions to registered charities of $$3,200.$

$5.$ As the Company expects to issue more shares during $2024,$ it made a number of amendments to its

articles of incorporation in $2023$ and included the legal costs in Other Expenses. These costs totaled

$$8,000.$

$6.$ Other Expenses includes interest on late income tax instalments of $$400$ and on late municipal tax payments of $$300.$

$7.$ On January $1,2023,$ the Company has UCC balances for its tangible assets as follows $($all assets are

eligible for Accelerated investment incentive when there is a new acquisition$)$:

Class $1$ $$400,000---($a$)$

Class $8575,000---($b$)$

Class $1045,000---($c$)$

Class $1368,000---($d$)$

a$.$ The Class $1$ balance relates to a single building acquired in year $2018$ at a cost of $$550,000.$ It is

estimated that the value of the land at this time was $$50,000.$ On February $1,2023,$ this building

is sold for $$612,000.$ It is estimated that the value of the land has increased to $$80,000.$ In the

accounting records $($i$.$e$.,$ net book value$),$ this real property was carried at $$507,000,$ $$457,000$

for the building and $$50,000$ for the land. The resulting gain on the building is included in the

accounting revenues.

The old building is replaced on February $15,2023$ with a new building acquired at a cost of

$$683,000$ of which $$83,000$ is allocated to land. The Company chose not to put the new building

into a separate Class $1$ so it does not qualify for the $6$ percent CCA rate. No elections are made

with respect to the replacement of the building $($i$.$e$.,$ the new building can be placed in the same

Class $1).[$Hint: Pay closer attention to the value of land for both buildings.$]$

b$.$ There are no dispositions of Class $8$ assets during the year. However, there are acquisitions in

the total amount of $$126,000.$

c$.$ As the Company has decided to lease all of its vehicles in the future, all of the assets in Class $10$

are sold during the year $($i$.$e$.,$ check Terminal loss$).$ The capital cost of these assets was $$93,000$

and the proceeds of disposition amounted to $$37,000.$ The net book value of these assets was

$$54,000$ and the resulting accounting loss of $$17,000$ was included in Other Expenses.

d$.$ The Class $13$ balance relates to a single lease that commenced on January $1,2021.$ The lease has

an initial term of seven years, with two successive options to renew for three years each.

Expenditures on this leasehold were $$50,000$ in $2019$ and $$27,000$ in $2022.$ There were no

further expenditures in $2023.$ The write$-$off of these expenditures for accounting purposes is

included in Amortization Expense.

$8.$ GBC Ltd$.$ has always deducted the maximum CCA allowable in each year of operation.

calculate:

Schedule $1$ Reconciliation

The calculation of GBC Ltd$.\text{'}$s Net Income For Tax Purposes would be as follows:

CCA Calculations

Maximum CCA and other related inclusions and deductions can be calculated as follows:

Summary of CCA Results

Notes