Scope Corp is a Canadian-controlled private corporation. They have been operating profitably for several years. During the current year they had increased sales and decreased costs which have resulted in an accounting profit for 2021. The company has both non-capital loss and net-capital loss to carry forward.

Part A: Assignment

Required:

1. You are to explain and provide an example of why the Active Business Income (ABI) Threshold of $500,000 is important. (1 Mark)

2. List one advantage and disadvantage of Incorporating. (2 Marks)

3. The owner has not taken a salary from their business this year, just $100,000 shareholder drawings. How should they be compensated, should the owner take a salary, dividends, or a combination of the two. Explain? (1 Mark)