Questions

The income statement that has been prepared by Fox Coffee Ltd.s accountant for the current year ending December 31, 2021, is as follows:

Sales Revenue			700,000
Cost of Goods Sold			300,000
Gross Profit			400,000
Operating Expenses:
	Salaries and Wages	135,000
	Property taxes	32,000
	Amortization expense (see Note 1)	51,000
	Charitable donations	5,500
	Life Insurance (see Note 2)	4,400
	Meals and Entertainment (see Note 3)	22,000
	Repairs and Maintenance (see Note 4)	30,500
	Other operating expenses	71,500	351,900
Operating income			48,100
Other revenue and expenses
	Gain on sale of equipment	9,000
	Loss on sale of furniture	- 3,500
	Interest revenue	2,300
	Dividends from taxable Canadian corporations	7,200	15,000
Income before taxes			63,100
	Income tax expense		8,837
Income after taxes			54,263

Note 1: Fox Coffees assets include:

	Cost	NBV	UCC
Land	675,000	675,000
Building	650,000	500,250	551,000
Furniture and equipment	295,000	192,000	150,000
Delivery vans	276,000	200,000	145,000

Buildings costing $610,000 were acquired in 1998. The remaining buildings were acquired in 1985 and had a UCC balance of 0.

During the year, Fox Coffee disposed of office furniture. The original cost was $3,500 and no proceeds were received. Custom equipment with an original cost of $35,000 was sold for $44,000. The equipment and furniture were replaced with new furniture and equipment costing $55,000.

Note 2: Fox Coffee carries a life insurance policy on the major shareholder to ensure the company can survive until personnel can be replaced in the event of her death.

Note 3: Meals and Entertainment expense included $900 for the company holiday party. The remainder was spent while entertaining clients.

Note 4: Repairs and maintenance expense included $5,000 for painting the walls of one of the 1998 buildings with a trendier colour. The major expense ($25,500) was incurred adding new luxury vinyl plank flooring to the same building.

Note 5: Fox Coffee has $7,250 in their net capital loss pool (from 2002), and a $14,000 balance in their non-capital loss carryover pool (from 2016).

REQUIRED:

Assignment 1 Capital Cost Allowance Schedule (CCA):

Using an Excel workbook, prepare the CCA schedule in good form for Fox Coffee Ltd. You may use the vertical format as in the textbook:

Deduct: lesser of

Beginning

cost or proceeds

Revised

Terminal

1/2 Year

Adjusted

CCA

Ending

Class

UCC

Additions

Disposals

UCC

Recapture

Loss

Rule

AccII

UCC

Rate

CCA

UCC

-

-

-