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Mr . Baker and Mr . Cain are members of a partnership that provides accounting services. The partnership's income statement for the fiscal period ending

Mr. Baker and Mr. Cain are members of a partnership that provides accounting services. The partnership's income statement for the fiscal period ending December31,2023, is provided.
Partnership Income Statement
Baker and Cain
Partnership Income Statement
Fiscal Period Ending December 31,2023
Fees received in cash
$404,000
Capital Gains on Temporary Holdings of Canadian Securities
13,600
Eligible Dividends received from Canadian corporations
49,000
Total Revenues
$466,600
Less Expenses:
Salaries and Wages
$(196,500)
Rent on Office Space
(19,000)
Interest on Bank Loans
(5,800)
AmortizationOffice Furniture and Equipment
(12,900)
General Office Expenses
(28,600)
Charitable Donations
(7,400)
Convention Registration Fees
(3,300)
Total Expenses
(273,500)
Net accounting income
$193,100
Other information
1.
The partnership agreement provides that all income and losses are to be shared equally.
2.
The salaries and wages reported on the income statement include a payment of $ 44 comma 200 to each of the two partners. The convention fees were for the two partners to attend the annual CPA conference. This was the only convention attended in 2023.
3.
Both partners use their personal automobiles for business purposes and pay their own operating expenses. Mr. Cain's automobile cost $ 24 comma 300,and, at the beginning of 2023, it had a UCC of $ 13 comma 100. His operating expenses for the year were $ 3 comma 800 for a total of 45 comma 000 kilometres driven. Only25% of the kilometres driven were for personal use.
4.
At the beginning of the current fiscal period, the partnership had fees receivable from clients of $ 27 comma 200. At the end of the year, the corresponding balance was $ 55 comma 600. The closing receivables have not been included in the determination of the partnership's net income.
5.
At the beginning of the year, the UCC of the office furniture was $ 26 comma 600. In 2023, computer equipment was purchased for $ 8 comma 600. Prior to this time, all computer equipment had been leased.
6.
The partnership makes regular annual contributions of $ 7 comma 400 to a registered charity.
7.
Assume that neither partner is subject to the highest federal income tax rate of33%.
Required
Calculate the minimum net income for Mr. Cain for 2023. Include in the calculation Mr. Cain's share of business income. Also, indicate other partnership amounts that would be allocated to Mr. Cain as well as any deductions or tax credits that can be used to reduce federal income tax payable that result from partnership allocations. Ignore GST/HST and PST considerations and immediate expensing.
Start by working on the business income of the partnership. In this step, calculate the Class 50 CCA. (Round your answer to the nearest whole dollar.)
Computer equipment purchased
\times
Class 50 CCA rate
\times
AccII rate
=
Class 50 CCA
\times
\times
=
Part 2
Next, calculate the business income of the partnership. (Round your answers to the nearest whole dollar.)
Fees received in cash
Additions:
Partners' salaries
Amortization
Charitable donations
Closing accounts receivable
Total additions
Deductions:
Opening accounts receivable
Capital gains on securities
Taxable dividends received
CCA
Class 8
Class 50
Total deductions
Business income
Part 3
Now, work on finding the addition to Mr. Cain's net income. In this step, calculate the CCA of the automobile. (Round your answer to the nearest whole dollar.)
UCC of automobile, beginning of 2023
\times
CCA rate of automobile
\times
Percentage of kilometres driven for business
=
CCA of automobile
\times
\times
=
Part 4
Now, find the addition to Mr. Cain's net income. (Round your answer to the nearest whole dollar.)
Partnership business income
Mr. Cain's share
50%
Mr. Cain's share of partnership business income
Partner expenses: Automobile expenses
CCA
Operating expenses
Business income
Other partnership income:
Taxable capital gains
Eligible dividends
Gross up
Total other partnership income
Mr. Cain's share
50%
Mr. Cain's share of other partnership income
Addition to net income
Part 5
Calculate the credit Mr. Cain can receive from charitable donations.
First amount of eligible gifts
\times
Rate for first amount
+
Rate for gifts exceeding first amount
\times
(
Mr. Cain's share of charitable donations
-
First amount of eligible gifts
)
=
Credit from charitable donations
\times
+
\times
(
-
)
=
Part 6
Finally, find the federal dividend tax credit to which Mr. Cain is entitled. (Round your answer to the nearest whole dollar.)
Gross up of eligible dividends
\times
Inclusion rate
\times
Federal dividend tax credit rate
=
Federal dividend tax credit
\times
\times
=

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