Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

I just need the missing values. The other numbers are correct. Thank you For the year ended August 31, 2021, Zefer Ltd., a Canadian-controlled private

image text in transcribedimage text in transcribed

I just need the missing values. The other numbers are correct. Thank you

For the year ended August 31, 2021, Zefer Ltd., a Canadian-controlled private corporation, reported a net income before income taxes of $551,700. The statement of income is summarized as follows: $459,800 Income from operations Other income: Interest Net gain on sale of assets Net Income per Financial Statements 6,100 85,800 $551,700 The net gain on the sale of assets consists of the following amounts: Gain on sale of franchise-$30,000 The franchise to operate a retail store was acquired seven years previously at a cost of $125,000. It was sold in 2021 for $155,000. The sale proceeds included a cash down payment of $20,000, with the balance payable in six annual instalments of $22,500 plus interest beginning in 2022. The franchise, which qualified as a class 14 asset, had an undepreciated capital cost of $111,300 at the time of the sale and was the only asset in its class. Gain on sale of warehouse property-$80,000 In July 2021, a warehouse property was sold for cash proceeds of $430,000 (land - $180,000, building - $250,000). The property had an original cost of $370,000 (land - $60,000, building - $310,000). The building, which was the only asset in class 1, had an undepreciated capital cost of $290,000. After the sale of the warehouse, temporary premises were leased until a new, larger warehouse was constructed. New land was purchased in January 2022 for $200,000. Construction of the new warehouse would be completed by July 2022. Loss on sale of shares of subsidiary-$24,200 Zefer sold shares of a subsidiary corporation for cash proceeds of $544,500.The shares were acquired five years ago for $568,700. Legal fees of $2,400 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 2021 taxation year. Required: Calculate Zefer's net income for tax purposes for the 2021 taxation year. Segment A Income Net Income per Financial Statements Less Net gain on sale of assets $ 551,700 (85,800) $ $ 2,400 $ 13,700 $ 482,000 Legal fees for sale agreement of subsidiary shares Recapture of CCA on franchise Terminal loss on sale of building Segment A sub total Segment B Capital Gains and Losses Franchise Taxable capital gain Less Franchise capital gain reserve Taxable capital gain on sale of land Allowable capital loss on shares Segment B Sub total $ 15,000 $ (13,300) $ 1,700 483,700 Net Income for tax purposes $ For the year ended August 31, 2021, Zefer Ltd., a Canadian-controlled private corporation, reported a net income before income taxes of $551,700. The statement of income is summarized as follows: $459,800 Income from operations Other income: Interest Net gain on sale of assets Net Income per Financial Statements 6,100 85,800 $551,700 The net gain on the sale of assets consists of the following amounts: Gain on sale of franchise-$30,000 The franchise to operate a retail store was acquired seven years previously at a cost of $125,000. It was sold in 2021 for $155,000. The sale proceeds included a cash down payment of $20,000, with the balance payable in six annual instalments of $22,500 plus interest beginning in 2022. The franchise, which qualified as a class 14 asset, had an undepreciated capital cost of $111,300 at the time of the sale and was the only asset in its class. Gain on sale of warehouse property-$80,000 In July 2021, a warehouse property was sold for cash proceeds of $430,000 (land - $180,000, building - $250,000). The property had an original cost of $370,000 (land - $60,000, building - $310,000). The building, which was the only asset in class 1, had an undepreciated capital cost of $290,000. After the sale of the warehouse, temporary premises were leased until a new, larger warehouse was constructed. New land was purchased in January 2022 for $200,000. Construction of the new warehouse would be completed by July 2022. Loss on sale of shares of subsidiary-$24,200 Zefer sold shares of a subsidiary corporation for cash proceeds of $544,500.The shares were acquired five years ago for $568,700. Legal fees of $2,400 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 2021 taxation year. Required: Calculate Zefer's net income for tax purposes for the 2021 taxation year. Segment A Income Net Income per Financial Statements Less Net gain on sale of assets $ 551,700 (85,800) $ $ 2,400 $ 13,700 $ 482,000 Legal fees for sale agreement of subsidiary shares Recapture of CCA on franchise Terminal loss on sale of building Segment A sub total Segment B Capital Gains and Losses Franchise Taxable capital gain Less Franchise capital gain reserve Taxable capital gain on sale of land Allowable capital loss on shares Segment B Sub total $ 15,000 $ (13,300) $ 1,700 483,700 Net Income for tax purposes $

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting

Authors: Karen Wilken Braun, Wendy M. Tietz

2nd Custom Edition

1269396803, 978-1269396806

More Books

Students also viewed these Accounting questions

Question

Did the researcher use triangulation?

Answered: 1 week ago