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XYZ Inc. has just completed its fiscal year ended December 31, 2020. Using GAAP, the accountant has determined that, for that taxation year, the Company
XYZ Inc. has just completed its fiscal year ended December 31, 2020. Using GAAP, the accountant has determined that, for that taxation year, the Company has Net Income of $200,000. The accountant provides the following information that was used in the determination of the Net Income for Accounting Purposes:
Instructions:
For each "question", provide theeffect on the reconciliation of Net Income for Accounting Purposes tominimumNet Income for Tax Purposes.
- Additionsto Net Income for Accounting Purposes should be entered in the boxas apositive number (write only numbers, do not write "+" sign).
- Deductionsfrom Net Income for Accounting Purposes should be entered in the box asanegative number.
- If the item would havenoeffecton the reconciliation,enterthe number0(zero) in the box.
- The Company has a Class 1 balance of $363,874 at the beginning of 2020. This building qualifies for the 4% Class 1 rate. During the year, the Company acquired another building at $146,810 which has been allocated to the same Class 1. Determine the effect of this Class 1's CCA deduction.
- The balance in Class 14.1 at the beginning of 2020 was $23,456. No new items were added to Class 14.1 nor were there any dispositions during the year.
- At the end of 2019, of accounts receivable of $100,000, a reserve for tax purposes of $26,949 was deducted. During 2020 year, $3,077 of accounts receivable were actually written off. At the end of 2020, the company expected $8,907 to be uncollectible and deducted that amount as a reserve for tax purposes. Determine the nef effect of the reserve for doubtful debts.
- A Senior VP of the company was reimbursed for her business travel using her own personal automobile. She received $0.66 per kilometre for the 4,000 kilometres that she drove for business purposes. This reimbursement was not included in her income as a taxable benefit. The company deducted the reimbursement as part of Travel Expenses in the calculation of Net Income for Accounting Purposes.
- Golf club dues of $5,222 for several employees was deducted in the calculation of Net Income for Accounting Purposes.
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