Please Guide with the following: Q1 Equipment Disposal CCA Schedule Calculation of Terminal Loss Sold Calculation of Tax Savings Interpretation of terminal loss Calculation of Recaptured CCA Calculation of Tax Savings Interpretation of recapture Correct Tax Rate Tax Assessment Finally, Ms. Matthews has one last request; she needs help understanding the tax consequences of the disposal of an old freighting truck. Prepare a CCA schedule for tax depreciation of a freighting truck purchased three years ago on January 1, 2015 for $350,000 (assume Class 16 with CCA rate of 40% and hall-year rule applying). Calculate the tax consequence if the truck were to be sold at the beginning of this year (i.e., end of 2017) for either $90,000 or $120,000. The truck is the only asset in the class. Utilize the average tax rate that America Coffee House had in the last five years in your analysis of the tax impact America Coffee House Statement of Earnings (Income Statement) For the Year Ended Dec 31, 2017 In millions of dollars 2013 2014 2015 2016 2017 Revenue N. America Retail Wholesale International Total Revenue $50.00 $20.00 $10.00 $80.00 $80.00 $18.00 $12.00 $110.00 $120.00 $18.00 $14.00 $152.00 $140.00 $17.00 $17.00 $174.00 $110.00 $18.00 $21.00 $149.00 $35.20 $44.80 $51.70 $58.30 $72.96 $79.04 $85.26 $88.74 $75.99 $73.01 Cost of Goods Sold (COGS) Gross Profit Operating Expenses Advertising & Marketing General & Administrative Research, IT, & Development Depreciation & Amortization Total Operating Expenses $5.00 $9.00 $3.00 $3.00 $20.00 $5.00 $13.00 $3.00 $7.00 $28.00 $8.00 $15.00 $3.00 $15.00 $41.00 $8.00 $17.00 $3.00 $22.00 $50.00 $10.00 $20.00 $3.00 $33.00 $66.00 $7.01 $12.80 Operating Income Interest Expense Pre-tax Income Income Taxes Net Income (Loss) $24.80 $5.60 $19.20 $4.80 $14.40 $30.30 $8.00 $22.30 $5.58 $16.73 $38.04 $9.60 $28.44 $7.11 $21.33 $38.74 $11.20 $27.54 $6.89 $20.66 $(5.79) $(1.45) $14.34) America Coffee House Statement of Financial Position (Balance Sheet) At Dec 31, 2017 In millions of dollars Assets Cash Accounts Receivable Inventory Total Current Assets 2013 $30.00 $20.00 $15.00 $65.00 2014 $22.13 $26.00 $20.00 $68.13 2015 $25.16 $32.50 $35.00 $92.66 2016 $22.81 $37.50 $50.00 2017 $6.47 $47.50 $65.00 $118.97 $110.31 Gross Property Plant & Equipment Less: Accumulated Depreciation Net Property, Plant, & Equipment $164.00 $(47.00) $117.00 $184.00 $(54.00) $130.00 $200.00 $(69.00) $131.00 $220.00 $191.00) $129.00 $240.00 S(124.00) $116.00 Intangible Assets Total Long-Term Assets $50.00 $167.00 $60.00 $190.00 $60.00 $191.00 $70.00 $199.00 $70.00 $186.00 Total Assets $232.00 $258.13 $283.66 $309.31 $304.97 Liabilities Account Payable Accrued Liabilities Current Liabilities Long-term Debt $44.00 $12.40 $56.40 $70.00 $50.80 $15.00 $65.80 $100.00 $60.00 $20.00 $80.00 $120.00 $70.00 $25.00 $95.00 $140.00 $75.00 $30.00 $105.00 $160.00 Total Liabilities $126.40 $165.80 $200.00 $235.00 $265.00 Shareholder's Equity Common Shares Preferred Shares Retained Earnings Total Equity $50.00 $10.00 $45.60 $105.60 $50.00 $10.00 $32.33 $50.00 $10.00 $23.66 $83.66 $50.00 $10.00 $14.31 $74.31 $50.00 $10.00 $(20.03) $39.97 Total Liabilities & Equity $232.00 $258.13 $309.31 $304.97 Please Guide with the following: Q1 Equipment Disposal CCA Schedule Calculation of Terminal Loss Sold Calculation of Tax Savings Interpretation of terminal loss Calculation of Recaptured CCA Calculation of Tax Savings Interpretation of recapture Correct Tax Rate Tax Assessment Finally, Ms. Matthews has one last request; she needs help understanding the tax consequences of the disposal of an old freighting truck. Prepare a CCA schedule for tax depreciation of a freighting truck purchased three years ago on January 1, 2015 for $350,000 (assume Class 16 with CCA rate of 40% and hall-year rule applying). Calculate the tax consequence if the truck were to be sold at the beginning of this year (i.e., end of 2017) for either $90,000 or $120,000. The truck is the only asset in the class. Utilize the average tax rate that America Coffee House had in the last five years in your analysis of the tax impact America Coffee House Statement of Earnings (Income Statement) For the Year Ended Dec 31, 2017 In millions of dollars 2013 2014 2015 2016 2017 Revenue N. America Retail Wholesale International Total Revenue $50.00 $20.00 $10.00 $80.00 $80.00 $18.00 $12.00 $110.00 $120.00 $18.00 $14.00 $152.00 $140.00 $17.00 $17.00 $174.00 $110.00 $18.00 $21.00 $149.00 $35.20 $44.80 $51.70 $58.30 $72.96 $79.04 $85.26 $88.74 $75.99 $73.01 Cost of Goods Sold (COGS) Gross Profit Operating Expenses Advertising & Marketing General & Administrative Research, IT, & Development Depreciation & Amortization Total Operating Expenses $5.00 $9.00 $3.00 $3.00 $20.00 $5.00 $13.00 $3.00 $7.00 $28.00 $8.00 $15.00 $3.00 $15.00 $41.00 $8.00 $17.00 $3.00 $22.00 $50.00 $10.00 $20.00 $3.00 $33.00 $66.00 $7.01 $12.80 Operating Income Interest Expense Pre-tax Income Income Taxes Net Income (Loss) $24.80 $5.60 $19.20 $4.80 $14.40 $30.30 $8.00 $22.30 $5.58 $16.73 $38.04 $9.60 $28.44 $7.11 $21.33 $38.74 $11.20 $27.54 $6.89 $20.66 $(5.79) $(1.45) $14.34) America Coffee House Statement of Financial Position (Balance Sheet) At Dec 31, 2017 In millions of dollars Assets Cash Accounts Receivable Inventory Total Current Assets 2013 $30.00 $20.00 $15.00 $65.00 2014 $22.13 $26.00 $20.00 $68.13 2015 $25.16 $32.50 $35.00 $92.66 2016 $22.81 $37.50 $50.00 2017 $6.47 $47.50 $65.00 $118.97 $110.31 Gross Property Plant & Equipment Less: Accumulated Depreciation Net Property, Plant, & Equipment $164.00 $(47.00) $117.00 $184.00 $(54.00) $130.00 $200.00 $(69.00) $131.00 $220.00 $191.00) $129.00 $240.00 S(124.00) $116.00 Intangible Assets Total Long-Term Assets $50.00 $167.00 $60.00 $190.00 $60.00 $191.00 $70.00 $199.00 $70.00 $186.00 Total Assets $232.00 $258.13 $283.66 $309.31 $304.97 Liabilities Account Payable Accrued Liabilities Current Liabilities Long-term Debt $44.00 $12.40 $56.40 $70.00 $50.80 $15.00 $65.80 $100.00 $60.00 $20.00 $80.00 $120.00 $70.00 $25.00 $95.00 $140.00 $75.00 $30.00 $105.00 $160.00 Total Liabilities $126.40 $165.80 $200.00 $235.00 $265.00 Shareholder's Equity Common Shares Preferred Shares Retained Earnings Total Equity $50.00 $10.00 $45.60 $105.60 $50.00 $10.00 $32.33 $50.00 $10.00 $23.66 $83.66 $50.00 $10.00 $14.31 $74.31 $50.00 $10.00 $(20.03) $39.97 Total Liabilities & Equity $232.00 $258.13 $309.31 $304.97