Mr. CFE is the sole proprietor of a hardware store called, The CFE Shop. Mr. CFE has decided to incorporate the business but wishes to minimize any income inclusions on the transfer of his business to the new corporation.

The CFE Shop has the following assets as at December 31, 2019:

Balance Sheet F.M.V.

Cash $ 20,000 $ 20,000

Accounts receivable (net of allowance

of $ 6000) 90,000 85,000

Inventory (cost $ 86,000) 86,000 86,000

Equipment (cost $ 80,000) 35,000(UCC) 5,000

Building (cost $ 60,000) 15,000(UCC) 75,000

Land used in business 200,000(ACB) 339,000

Auto used in business(cost $ 16,000) 11,000 (UCC) 12,000

Goodwill 0 (ACB) 60,000

Mortgage payable on land 46,000

As consideration for the transfer of the above assets, Mr. UFE would like to take back the maximum amount of non-share consideration with the balance of consideration being in the form of preferred shares. Tax payable is to be minimized in this transaction.

REQUIRED: Insert your responses to the following questions in the blank space indicated. (You do not need to show your detailed calculations)

1. With respect to the auto,

the total non share consideration should be $__________________

and the total preferred share consideration should be $ ____________________

2. With respect to the building,

the total non-share consideration should be $________________

and the total preferred share consideration should be $ ________________

3. With respect to the land,

the total non-share consideration should be $ ______________

and the total preferred share consideration should be $ ______________

4.With respect to the goodwill,

the total non-share consideration should be $____________________

and the total preferred share consideration should be $ _______________

5.The total elected amount (tax value) of assets to be transferred

using section 85 is $ _____________

6.The F.M.V. of assets to be transferred using section 85 is $ ______________