M&P Investment Income! Income12 2018 2019 and Beyond 2018 2019 and Beyond Federal rates Page 50 38.0% 38.0% 38.0% 38.0% General corporate rate Federal abatement (10.0) 28.0 (10.0) 28.0 (10.0) 28.0 (10.0) 28.0 M&P deduction" (13.0) (13.0) 0.0 0.0 Refundable Tax 0.0 0.0 10.7 10.7 15.0 15.0 38.7 38.7 Provincial rates British Columbia 12.0% 12.0% 12.0% 12.0% Alberta 12.0 12.0 12.0 12.0 Saskatchewan? 10.0 10.0 12.0 12.0 Manitoba 12.0 12.0 12.0 12.0 Ontario 10.0 10.0 11.5 11.5 Quebec 11.7 11.6/11.5 11.7 11.6/11.5 New Brunswick 14.0 14.0 14.0 14.0 Nova Scotia 16.0 16.0 16.0 16.0 Prince Edward Island 16.0 16.0 16.0 16.0 Newfoundland and Labrador 15.0 15.0 15.0 15.0 16. Preparing a Statement of Financial Position (L01) Prepare a 2018 statement of financial position for Listowel Corp. based on the following information: cash = $127,000; patents and copyrights = $630,000; accounts payable = $210,000; accounts receivable = $105,000; tangible net fixed assets = $1,620,000; inventory = $293,000; notes payable = $160,000; accumulated retained earnings = $1,278,000; long-term debt = $845,000. 17. Residual Claims (L01) Pelham Inc. is obligated to pay its creditors $5,800 during the year. a. What is the market value of the shareholder's equity if assets have a market value of $7,100? b. What if assets equal $5,200? 18. Marginal versus Average Tax Rates (L04) (Refer to Table 2.7) In 2019, Alberta-based Corporation Growth has $88,000 in taxable income, and Alberta-based Corporation Income has $8,800,000 in taxable income. a. What is the tax bill for each? b. Suppose both firms have identified a new project that will increase taxable income by $10,000. How Page 64 much additional taxes will each firm pay? Is this amount the same? If not, why? Small Business Income Active Business Income 2018 2019 and Beyond 2018 2019 and Beyond Federal rates 38.0% 38.0% 38.0% 38.0% General corporate rate Federal abatement (10.0) 28.0 (10.0) 28.0 (10.0) 28.0 (10.0) 28.0 Small business deduction (18.0) (19.0) 0.0 0.0 Rate reduction 0.0 0.0 (13.0) (13.0) 10.0 9.0 15.0 15.0 Provincial rates 6 British Columbia 2.0% 2.0% 12.0% 12.0% Alberta 2.0 2.0 12.0 12.0 Saskatchewan? 2.0 2.0 12.0 12.0 Manitoba 0.0 0.0 12.0 12.0 Ontario 3-5 3-5 11.5 11.5 Quebec 8.0 8.0 11.7 11.6/11.5 New Brunswick to 3.0/2.5 2.5 14.0 14.0 Nova Scotia 3.0 3.0 16.0 16.0 Prince Edward Island 4-5 4-5 16.0 16.0 Newfoundland and Labrador 3.0 3.0 15.0 15.0 M&P Investment Income! Income12 2018 2019 and Beyond 2018 2019 and Beyond Federal rates Page 50 38.0% 38.0% 38.0% 38.0% General corporate rate Federal abatement (10.0) 28.0 (10.0) 28.0 (10.0) 28.0 (10.0) 28.0 M&P deduction" (13.0) (13.0) 0.0 0.0 Refundable Tax 0.0 0.0 10.7 10.7 15.0 15.0 38.7 38.7 Provincial rates British Columbia 12.0% 12.0% 12.0% 12.0% Alberta 12.0 12.0 12.0 12.0 Saskatchewan? 10.0 10.0 12.0 12.0 Manitoba 12.0 12.0 12.0 12.0 Ontario 10.0 10.0 11.5 11.5 Quebec 11.7 11.6/11.5 11.7 11.6/11.5 New Brunswick 14.0 14.0 14.0 14.0 Nova Scotia 16.0 16.0 16.0 16.0 Prince Edward Island 16.0 16.0 16.0 16.0 Newfoundland and Labrador 15.0 15.0 15.0 15.0 16. Preparing a Statement of Financial Position (L01) Prepare a 2018 statement of financial position for Listowel Corp. based on the following information: cash = $127,000; patents and copyrights = $630,000; accounts payable = $210,000; accounts receivable = $105,000; tangible net fixed assets = $1,620,000; inventory = $293,000; notes payable = $160,000; accumulated retained earnings = $1,278,000; long-term debt = $845,000. 17. Residual Claims (L01) Pelham Inc. is obligated to pay its creditors $5,800 during the year. a. What is the market value of the shareholder's equity if assets have a market value of $7,100? b. What if assets equal $5,200? 18. Marginal versus Average Tax Rates (L04) (Refer to Table 2.7) In 2019, Alberta-based Corporation Growth has $88,000 in taxable income, and Alberta-based Corporation Income has $8,800,000 in taxable income. a. What is the tax bill for each? b. Suppose both firms have identified a new project that will increase taxable income by $10,000. How Page 64 much additional taxes will each firm pay? Is this amount the same? If not, why? Small Business Income Active Business Income 2018 2019 and Beyond 2018 2019 and Beyond Federal rates 38.0% 38.0% 38.0% 38.0% General corporate rate Federal abatement (10.0) 28.0 (10.0) 28.0 (10.0) 28.0 (10.0) 28.0 Small business deduction (18.0) (19.0) 0.0 0.0 Rate reduction 0.0 0.0 (13.0) (13.0) 10.0 9.0 15.0 15.0 Provincial rates 6 British Columbia 2.0% 2.0% 12.0% 12.0% Alberta 2.0 2.0 12.0 12.0 Saskatchewan? 2.0 2.0 12.0 12.0 Manitoba 0.0 0.0 12.0 12.0 Ontario 3-5 3-5 11.5 11.5 Quebec 8.0 8.0 11.7 11.6/11.5 New Brunswick to 3.0/2.5 2.5 14.0 14.0 Nova Scotia 3.0 3.0 16.0 16.0 Prince Edward Island 4-5 4-5 16.0 16.0 Newfoundland and Labrador 3.0 3.0 15.0 15.0