Part C and Part D.

376,340 661,025 Other Income, Gains & Losses Income Before Tax Expense Income Tax Expense Current Future Net Income The Class 14 balance relates to a franchise agreement which was signed on September 1 2017. The franchise agreement has a term of 8 years. The franchise fee, which was paid on the date the agreement was signed, was $ 32,574 There were no further expenditures related to this franchise in the current year and the initial franchise fee was expersed in 2017. 132,205 66,103 5 $ (198,309) 462,718 Detailed information Regarding Above Income Statement: Prior to 2019, all laptops were leased. During the current year, laptops and computers were purchased for $ 50,071 1 Colorfast spent 16,239 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 as an unlimited life. In addition, on July 1. (director & shareholder) costing 2019 Colorfast purchased an Nissan GT-R Nismo for Curtis Chen S 217,200. 2 Selling and Administrative costs include calculated based on a review of the aged receivables listing 5,661 in bad debt expense 3 Selling & Administrative costs include contributions to registered charities of 17,513 7 On June 6, 2019 , Colorfast Inc. acquired an unincorporated business. The purchase price included 55,421 for goodwill. At the end of the year, the goodwill was tested for impairment and an impairment loss for accounting purposes) was recorded in the amount of $ 13,855 (this is included in Other Income, Gains & Losses on the Income Statement above). $ 11,332 4 Selling & Administrative costs includes the following: Insurance premiums on a life insurance policy for the president Note: the life insurance policy is required as collateral for a loan legal fees paid to the corporation's lawyer to review a loan contract - Business meals and entertainment costs of & Selling and administrative costs includes interest and late filing penalties for GST returns of S 406. $ $ 4,736 18,474 5 Selling and Administrative costs include compensation expense for management, Curtis and Constance who are also the owners of Colorfast inc. Included in compensation expense in addition to salary expense) are the following amounts: 9 Other income, Gains & Losses includes an accounting gain on the sale of land owned by the corporation. The land was purchased several years ago and has been used as a storage lot for Colorfast Inc. The land was originally purchased for 94,729 and was sold for proceeds of 368,113 . The purchaser will pay for the land using instalment ments of 66,260 in 2019, then 184,056 in 2020 and the remainder will be paid in 2021 Traverse Ltd. would like the maximum deferral on the taxable capital gain on the sale of this land $ $ 6,946 20,299 - Membership fee for a local golf and country club - Bonuses declared on Dec. 31, * Note: The bonuses were paid on Mar. 15 - Automobile Allowances for business travel incurred * Note: The allowance was paid at the rate of 2019 2020 has the following RDTOH S $ 10,207 .08 per business kilometer 4 $ $ 7,443 2,853 from the 10 According to the prior year's corporate tax return, Colorfast balances: Eligible Refundable Dividend Taxon Hand (the Company received a dividend refund of Eligible ROTOW in the prior year) Non-eligible Refundable Dividend Taxon Hand (the Company received a dividend refund of Non-ENgible RDTOW in the prior year) 6 On January 1, S 9 $ 26,050 ,986 from the Class 1 Class 8 Class 10 Class 14 2019, the Company had the following UCC Balances: Building acquired in 2014 $ 314,229 227,349 40,642 27,141 There are no additions or dispositions of Class 1 assets during the year. There are dispositions of Class 8 assets during the year of and acquisitions in the total amount of were sold in the year had an original cost of 11 Also included in the Other Income, Gains & Losses balance recorded on the income Statement are the following amounts: Eligible Dividends from the Company's portfolios of investments 17,295 (note: the above dividends were received from Taxable Canadian Corporations) Non-Eligible Dividends from a wholly owned subsidiary 12,562 (note: the wholly owned subsidiary received a dividend refund as a result of paying this dividend of S 3 ,769 ) Canadian & Foreign Source Interest Income 51,627 (note: the foreign source interest income included in the total above is $ 21,683 ) 305,839 (Proceeds! The Class 8 assets that 147,790 197,795 The Company has decided to lease of all its trucks and trailers in the future, therefore all of the assets in Class 10 are sold during the year. The capital cost of these assets was 276,610 and the proceeds of disposition amounted to 149,080 The net book value of these assets was 113,753 and the resulting accounting Rain of 35,327 was included in Other Income and Expenses 12 Calorfast Inc. has net capital loss carryover balance from 2014 of $ 67,984 and a non-capital loss carryover balance from 2015 of $ 27,336 . Management has indicated that they would like to deduct as much of these amounts as possible in the current year. 13 The corporation has permanent establishments in Alberta, Ontario and the United States. Its gross revenues, salaries and wages, and operating profit values are as follows: Location Alberta Ontario U.S. Totals Gross Revenue 1,048,784 31,125 372,149 1,452,058 Payroll 95,148 4,669 74,430 174,247 Gross Profit 270,654 54,131 256,099 580,823 14 Colorfast Inc. is associated with two other Canadian controlled private corporations. They have agreed to allow Colorfast to claim 236,464 of the total annual business limit 15 The foreign jurisdiction withheld tax of 38,406 from the US-source business income and 3,253 from the foreign non business interest) income. Assume that the foreign tax credits for business and non-business income are equal to the amounts withheld Curtis and Constance Chen, 16 Colorfast Inc. paid the following dividends to it's shareholders, in the current year: Eligible Dividends Non-Eligible Dividends 4,466 15,630 Required Case A: Please prepare a response to each of the questions indicated below (Part A through D below) using the excel spreadsheet template. Be sure to show all of your work. Include Income Tax Act references for each adjustment made in your calculations in PART A & PART B of the assignment only. Your submission, with all of your group member's names, must be submitted via the Blackboard Learn assignment 2 link. Calculate the corporation's minimum net income for the year ended December 31 2019 under the provisions of Division of the Income Tax Act. Support your with calculations and the appropriate references to the income Tax Act. Be sure to use the Section 3 format for the calculation of net income for tax purposes. Marks will only be receieved for income properly categorized by source. Colorfast Inc. has a policy of always taking maximum CCA deduction. Please show all of your work for the CCA calculations. Assume all expenses are reasonable in the circumstances, unless otherwise indicated above. Calculate the minimum taxable income for the company for the year ended, December 2019. Support your answer with calculations and provide the appropriate references to the income Tax Act. Ind cate the type and amount of any balances available for carry forward to subsequent years. PART C: Determine Colorfast Inc.'s Part I Tax Payable for the year ending December 31, and provide all explanations and assumptions you made, if any. 2019 NOTE: Part I Tax Payable includes the following amounts: base amount of federal tax, general rate reduction, federal tax abatement, additional refundable tax (ART) on investment income, the small business deduction and foreign tax credits. PART D: Determine Colorfast Inc.'s Part IV Tax Payable for the year ending December 31, 2019 376,340 661,025 Other Income, Gains & Losses Income Before Tax Expense Income Tax Expense Current Future Net Income The Class 14 balance relates to a franchise agreement which was signed on September 1 2017. The franchise agreement has a term of 8 years. The franchise fee, which was paid on the date the agreement was signed, was $ 32,574 There were no further expenditures related to this franchise in the current year and the initial franchise fee was expersed in 2017. 132,205 66,103 5 $ (198,309) 462,718 Detailed information Regarding Above Income Statement: Prior to 2019, all laptops were leased. During the current year, laptops and computers were purchased for $ 50,071 1 Colorfast spent 16,239 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 as an unlimited life. In addition, on July 1. (director & shareholder) costing 2019 Colorfast purchased an Nissan GT-R Nismo for Curtis Chen S 217,200. 2 Selling and Administrative costs include calculated based on a review of the aged receivables listing 5,661 in bad debt expense 3 Selling & Administrative costs include contributions to registered charities of 17,513 7 On June 6, 2019 , Colorfast Inc. acquired an unincorporated business. The purchase price included 55,421 for goodwill. At the end of the year, the goodwill was tested for impairment and an impairment loss for accounting purposes) was recorded in the amount of $ 13,855 (this is included in Other Income, Gains & Losses on the Income Statement above). $ 11,332 4 Selling & Administrative costs includes the following: Insurance premiums on a life insurance policy for the president Note: the life insurance policy is required as collateral for a loan legal fees paid to the corporation's lawyer to review a loan contract - Business meals and entertainment costs of & Selling and administrative costs includes interest and late filing penalties for GST returns of S 406. $ $ 4,736 18,474 5 Selling and Administrative costs include compensation expense for management, Curtis and Constance who are also the owners of Colorfast inc. Included in compensation expense in addition to salary expense) are the following amounts: 9 Other income, Gains & Losses includes an accounting gain on the sale of land owned by the corporation. The land was purchased several years ago and has been used as a storage lot for Colorfast Inc. The land was originally purchased for 94,729 and was sold for proceeds of 368,113 . The purchaser will pay for the land using instalment ments of 66,260 in 2019, then 184,056 in 2020 and the remainder will be paid in 2021 Traverse Ltd. would like the maximum deferral on the taxable capital gain on the sale of this land $ $ 6,946 20,299 - Membership fee for a local golf and country club - Bonuses declared on Dec. 31, * Note: The bonuses were paid on Mar. 15 - Automobile Allowances for business travel incurred * Note: The allowance was paid at the rate of 2019 2020 has the following RDTOH S $ 10,207 .08 per business kilometer 4 $ $ 7,443 2,853 from the 10 According to the prior year's corporate tax return, Colorfast balances: Eligible Refundable Dividend Taxon Hand (the Company received a dividend refund of Eligible ROTOW in the prior year) Non-eligible Refundable Dividend Taxon Hand (the Company received a dividend refund of Non-ENgible RDTOW in the prior year) 6 On January 1, S 9 $ 26,050 ,986 from the Class 1 Class 8 Class 10 Class 14 2019, the Company had the following UCC Balances: Building acquired in 2014 $ 314,229 227,349 40,642 27,141 There are no additions or dispositions of Class 1 assets during the year. There are dispositions of Class 8 assets during the year of and acquisitions in the total amount of were sold in the year had an original cost of 11 Also included in the Other Income, Gains & Losses balance recorded on the income Statement are the following amounts: Eligible Dividends from the Company's portfolios of investments 17,295 (note: the above dividends were received from Taxable Canadian Corporations) Non-Eligible Dividends from a wholly owned subsidiary 12,562 (note: the wholly owned subsidiary received a dividend refund as a result of paying this dividend of S 3 ,769 ) Canadian & Foreign Source Interest Income 51,627 (note: the foreign source interest income included in the total above is $ 21,683 ) 305,839 (Proceeds! The Class 8 assets that 147,790 197,795 The Company has decided to lease of all its trucks and trailers in the future, therefore all of the assets in Class 10 are sold during the year. The capital cost of these assets was 276,610 and the proceeds of disposition amounted to 149,080 The net book value of these assets was 113,753 and the resulting accounting Rain of 35,327 was included in Other Income and Expenses 12 Calorfast Inc. has net capital loss carryover balance from 2014 of $ 67,984 and a non-capital loss carryover balance from 2015 of $ 27,336 . Management has indicated that they would like to deduct as much of these amounts as possible in the current year. 13 The corporation has permanent establishments in Alberta, Ontario and the United States. Its gross revenues, salaries and wages, and operating profit values are as follows: Location Alberta Ontario U.S. Totals Gross Revenue 1,048,784 31,125 372,149 1,452,058 Payroll 95,148 4,669 74,430 174,247 Gross Profit 270,654 54,131 256,099 580,823 14 Colorfast Inc. is associated with two other Canadian controlled private corporations. They have agreed to allow Colorfast to claim 236,464 of the total annual business limit 15 The foreign jurisdiction withheld tax of 38,406 from the US-source business income and 3,253 from the foreign non business interest) income. Assume that the foreign tax credits for business and non-business income are equal to the amounts withheld Curtis and Constance Chen, 16 Colorfast Inc. paid the following dividends to it's shareholders, in the current year: Eligible Dividends Non-Eligible Dividends 4,466 15,630 Required Case A: Please prepare a response to each of the questions indicated below (Part A through D below) using the excel spreadsheet template. Be sure to show all of your work. Include Income Tax Act references for each adjustment made in your calculations in PART A & PART B of the assignment only. Your submission, with all of your group member's names, must be submitted via the Blackboard Learn assignment 2 link. Calculate the corporation's minimum net income for the year ended December 31 2019 under the provisions of Division of the Income Tax Act. Support your with calculations and the appropriate references to the income Tax Act. Be sure to use the Section 3 format for the calculation of net income for tax purposes. Marks will only be receieved for income properly categorized by source. Colorfast Inc. has a policy of always taking maximum CCA deduction. Please show all of your work for the CCA calculations. Assume all expenses are reasonable in the circumstances, unless otherwise indicated above. Calculate the minimum taxable income for the company for the year ended, December 2019. Support your answer with calculations and provide the appropriate references to the income Tax Act. Ind cate the type and amount of any balances available for carry forward to subsequent years. PART C: Determine Colorfast Inc.'s Part I Tax Payable for the year ending December 31, and provide all explanations and assumptions you made, if any. 2019 NOTE: Part I Tax Payable includes the following amounts: base amount of federal tax, general rate reduction, federal tax abatement, additional refundable tax (ART) on investment income, the small business deduction and foreign tax credits. PART D: Determine Colorfast Inc.'s Part IV Tax Payable for the year ending December 31, 2019