For the year ending December 31, 2020, the Income Statement of Maple Enterprises., prepared in accordance with generally accepted accounting principles, is as follows:

Revenues $973,000

Expenses:

Cost Of Goods Sold ($272,000)

Selling And Administrative Costs ( 132,000)

Amortization Expense ( 156,000)

Other Expenses ( 137,000) ( 697,000)

Income Before Tax Expense $276,000

Other Information:

1. Maple Enterprises values its closing inventory at the lower or cost or market.
2. The Company spent $6,000 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.
3. Selling And Administrative Costs include:

• $15,000 in business meals and entertainment.
• Membership fees for several employees in a local golf and country club. These fees total $3,400.

4. Other Expenses include:

• Contributions to registered charities of $3,700.
• Bond discount amortization of $2,500.
• $2,000 premium for life insurance on the company president, the proceeds of which are payable to the company.
• Bad debts is based on a reserve system under which outstanding accounts receivable are reviewed and expected losses are forecast. $1,600 was expensed for Bad Debts in 2020.

5. As the Company expects to issue more shares during 2020, it made a number of amendments to its articles of incorporation in 2020 and included the legal costs in Other Expenses. These costs totalled $2,000.
6. Maple Enterprises has always claimed maximum CCA. On January 1, 2020, the Company has UCC balances for its tangible assets as follows:

Class 1	$200,000	(one building in class)
Class 8	190,000
Class 10.1	21,000

7. In 2020, the company purchased the following assets:

Equipment (manufacturing)	$30,000
Product licence for an indefinite period	10,000

8. The following assets were sold during the year:

• The building, which was used more than 90% for manufacturing and production, was sold for $260,000 (original cost$230,000).
• The presidents Lexus was sold for $15,000 (original cost $68,000)

9. During 2020, the company purchased office furniture for $14,000.

Required:

Using the formatted spreadsheet provided, calculate the net business income for tax purposes and net income for tax purposes for the corporation for 2020. Indicate your rationale for the treatment of all information given. Include page references to your text for support of your analyses.

Using the CRA-designed chart for calculating CCA, calculate the maximum CCA allowed and ending UCC balances for all CCA classes.

Ch 6 Assignment - Maple Enterprises Item # Analysis Text Ref Net Income from Business Accounting Income Adjustments: 1 Inventory 2 Landscaping 3. Selling and Administrative Costs: Business meals and entertainment Membership Fees - Golf and Country Club 4. Other Expenses: Charitable donations Bond discount amortization Life Insurance Bad Debts 5 Amendment to articles of incorporation 6-9 | See next worksheet for calculations Recapture (if any) See next worksheet for calculations Terminal loss (if any) See next worksheet for calculations All other adjustments required upon review of income statement: Minimum Net Business Income for Tax Purposes Net Income for Tax Purposes Ch 6 Assignment - Maple Enterprises Calculations for Capital Assets 1 2 3 4 5 12 13 UCC @ 6 UCC after additions and dispositions (Col 2+3-5) Cost of additions during the year CCA for the year Class 7 POD avail to reduce additions of Cost of additions (from C) which are AllP beginning of Proceeds of dispositions during the year 8 9 10 11 UCC adj for Adj for current year Acquisitions Base amt for additions of subject to half CCA (Col 6+84 CCA rate % (Col 4-7) 9) factor 12*(col 3-4-5) UCC @end of year (col 6- 12) the year (Col 5-3+4) year rule (col 10x11) Maximum CCA: Ch 6 Assignment - Maple Enterprises Item # Analysis Text Ref Net Income from Business Accounting Income Adjustments: 1 Inventory 2 Landscaping 3. Selling and Administrative Costs: Business meals and entertainment Membership Fees - Golf and Country Club 4. Other Expenses: Charitable donations Bond discount amortization Life Insurance Bad Debts 5 Amendment to articles of incorporation 6-9 | See next worksheet for calculations Recapture (if any) See next worksheet for calculations Terminal loss (if any) See next worksheet for calculations All other adjustments required upon review of income statement: Minimum Net Business Income for Tax Purposes Net Income for Tax Purposes Ch 6 Assignment - Maple Enterprises Calculations for Capital Assets 1 2 3 4 5 12 13 UCC @ 6 UCC after additions and dispositions (Col 2+3-5) Cost of additions during the year CCA for the year Class 7 POD avail to reduce additions of Cost of additions (from C) which are AllP beginning of Proceeds of dispositions during the year 8 9 10 11 UCC adj for Adj for current year Acquisitions Base amt for additions of subject to half CCA (Col 6+84 CCA rate % (Col 4-7) 9) factor 12*(col 3-4-5) UCC @end of year (col 6- 12) the year (Col 5-3+4) year rule (col 10x11) Maximum CCA