Question two (18 marks) For its taxation year ending December 31, 2018, the condensed Income Statement of Manipee Systems Limited (MSL), prepared in accordance with generally accepted accounting principles, was as follows: Manipee Systems Limited Condensed Income Statement Year Ending December 31, 2018 Revenues Expenses (Excluding Taxes) Income Before Taxes $926,000 (713,000) Other Information: 1. The Company was Canadian controlled throughout the year. All of its shares are privately held by Ms. Mildred Manipee and her immediate family. It is not associated with any other company The Company's Expenses included amortization of $126,000. The Company's accountant has calculated maximum CCA for the year to be $138,000 The Company's Revenues include a gain on the sale of a depreciable asset of $27,000. The asset had a cost of $109,000, a net book value of $105,000, and was sold for $132,000. It was not the last asset in its CCA class, and the UCC balance in the class at the end of the year was positive Revenues include dividends from taxable Canadian corporations in the amount of $12,000 At the beginning of 2018, MSL has available a non-capital loss carry forward of $126,000, as well as a net capital loss carry forward of $22,500 ((1/2)($45,000)] During the year, the Company's Canadian active business income totalled $156,000 The Company had permanent establishments in Ontario and Manitoba and also carried on business in the United States. The amount of revenues and salaries in these locations were as follows: 2. 3. 4. 5. 6. 7. Ontario Manitoba United States Revenues Salaries $427,000 $310,000 $150,000 26,000 162,000 87,000 The operations in the United States did not make a profit and, as a consequence, no foreign taxes were withheld BUSI 4005 Taxation II Winter 2019 Section B Assignment one Required A. Calculate the minimum Net Income For Tax Purposes for MSL for the year ending December 31, 2018. Calculate the minimum Taxable Income for MSL for the year ending December 31, 2018. Indicate the amount, and type, of any loss carry overs that are available at the end of the year B. C. Calculate the minimum federal Part I Tax Payable for MSL for the year ending December 31, 2018 Question two (18 marks) For its taxation year ending December 31, 2018, the condensed Income Statement of Manipee Systems Limited (MSL), prepared in accordance with generally accepted accounting principles, was as follows: Manipee Systems Limited Condensed Income Statement Year Ending December 31, 2018 Revenues Expenses (Excluding Taxes) Income Before Taxes $926,000 (713,000) Other Information: 1. The Company was Canadian controlled throughout the year. All of its shares are privately held by Ms. Mildred Manipee and her immediate family. It is not associated with any other company The Company's Expenses included amortization of $126,000. The Company's accountant has calculated maximum CCA for the year to be $138,000 The Company's Revenues include a gain on the sale of a depreciable asset of $27,000. The asset had a cost of $109,000, a net book value of $105,000, and was sold for $132,000. It was not the last asset in its CCA class, and the UCC balance in the class at the end of the year was positive Revenues include dividends from taxable Canadian corporations in the amount of $12,000 At the beginning of 2018, MSL has available a non-capital loss carry forward of $126,000, as well as a net capital loss carry forward of $22,500 ((1/2)($45,000)] During the year, the Company's Canadian active business income totalled $156,000 The Company had permanent establishments in Ontario and Manitoba and also carried on business in the United States. The amount of revenues and salaries in these locations were as follows: 2. 3. 4. 5. 6. 7. Ontario Manitoba United States Revenues Salaries $427,000 $310,000 $150,000 26,000 162,000 87,000 The operations in the United States did not make a profit and, as a consequence, no foreign taxes were withheld BUSI 4005 Taxation II Winter 2019 Section B Assignment one Required A. Calculate the minimum Net Income For Tax Purposes for MSL for the year ending December 31, 2018. Calculate the minimum Taxable Income for MSL for the year ending December 31, 2018. Indicate the amount, and type, of any loss carry overs that are available at the end of the year B. C. Calculate the minimum federal Part I Tax Payable for MSL for the year ending December 31, 2018