Chapter 11 - Multiple Choice Questions_ Attempt review.pdf - Chapter 11 Multiple Choice Questions Attempt review Dashboard My courses

Chapter 11 - Multiple Choice Questions_ Attempt review.pdf...

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Unformatted text preview: 9/14/2019 Chapter 11 - Multiple Choice Questions: Attempt review Dashboard / My courses / F2019-ACCT4350-Guelph / Chapter 11: Computation of Taxable Income and Tax After General Reductions for Corporations / Chapter 11 - Multiple Choice Questions Started on State Completed on Time taken Marks Grade Question 1 Correct Mark 1.00 out of 1.00 Saturday, 14 September 2019, 7 14 PM Finished Saturday, 14 September 2019, 7 17 PM 2 mins 30 secs 6.00/6.00 10.00 out of 10.00 (100%) Helen acquired all of the voting shares of Lossco Inc. from a non-related individual on February 1, 2019 Lossco has always had a December 31 year end since its incorporation. Which ONE of the following statements is TRUE? Select one: A. Lossco had a deemed year end February 1, 2019. B. Lossco may select any date, within the 53-week period commencing February 1, 2019, as its new year end. is correct. Loss Co may select any date, within the 53-week period commencing February 1, 2019, as its new year end. C. Lossco must continue to have a December 31 year end unless the CRA grants permission for a change. D. Lossco had a deemed year end on January 31, 2019 and is required to keep January 31 as its year end for the future. The correct answer is: Lossco may select any date, within the 53-week period commencing February 1, 2019, as its new year end. Question 2 Correct Mark 1.00 out of 1.00 Jim acquired control of Smart Ltd. from an unrelated person on May 15, 2019. The following information relates to the inventory and capital assets owned by Smart Ltd. at that time. Cost FMV Inventory . . . . . . . . . . . . . . . . . . . . . . . . $120,000$100,000 Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200,000 140,000 Building . . . . . . . . . . . . . . . . . . . . . . . . . 100,000 75,000 Marketable securities . . . . . . . . . . . . . . 20,000 30,000 For its taxation year ended on May 14, 2019, Smart Ltd. is required to recognize a capital loss of: Select one: A. $85,000 B. $80,000 C. $60,000 is correct. The ACB of the land is reduced from $200,000 to $140,000, its FMV. The $60,000 reduction is deemed to be a capital loss for the taxation year ended May 14, 2019. D. $50,000 The correct answer is: $60,000 1/4 9/14/2019 Question 3 Correct Mark 1.00 out of 1.00 Chapter 11 - Multiple Choice Questions: Attempt review On April 1, 2019, Calm Corp purchased 72% of the voting shares of X Ltd. from an unrelated person. The tax position of the fixed assets of X Ltd. at that time is summarized below. Cost UCC FMV Automobiles (Class 10) . . . . . . . $100,000 $42,000$45,000 Computer equipment (Class 50) 64,000 38,000 33,000 Computer software (Class 12) . . 30,000 Nil 5,000 Office furniture & equipment (Class 8) 80,000 58,000 48,000 The business loss of X Ltd. for the year ended March 31, 2019, will be increased by deemed CCA of: Select one: A. $7,000 B. $10,800 C. $15,000 is correct. The UCC of the Class 50 computer equipment is reduced by $5,000, from $38,000 to $33,000. The UCC of the Class 8 office furniture and equipment is reduced by $10,000, from $58,000 to $48,000. The total of the two reductions, $15,000, is deemed to have been claimed as CCA in the year ended March 31, 2019. D. $23,000 The correct answer is: $15,000 2/4 9/14/2019 Question 4 Correct Mark 1.00 out of 1.00 Chapter 11 - Multiple Choice Questions: Attempt review For its year ended December 31, 2018, its first year end since its incorporation, Lakehead Co. (Lakehead) reported the following income (losses) for tax purposes. Business loss (retailer of widgets) . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (20,000) Capital loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (6,000) On January 1, 2019, Pacific Co. acquired control of Lakehead from an unrelated person and transferred its profitable gadget retailing business to Lakehead. For its year ending December 31, 2019, Lakehead is expected to have the following income/losses. Business loss (widgets) . . . . . . . . . . . . . . . . . . . . . . . . . $ . . (3,000) Business income (gadgets) . . . . . . . . . . . . . . . . . . . . . . 15,000 . . Taxable capital gain on sale of capital asset . . . . . . . . . 6,000 . Assuming widgets and gadgets are similar products, which one of the following statements is TRUE? Select one: A. For its year ending December 31, 2019, Lakehead will be able to deduct net capital losses of $3,000, provided the widget retailing business is carried on throughout the taxation year ended December 31, 2019 with a reasonable expectation of profit. B. For its year ending December 31, 2019, Lakehead will be able to deduct non-capital losses of $18,000 (maximum), provided the widget retailing business is carried on throughout the taxation year ended December 31, 2019, with a reasonable expectation of profit. C. For its year ending December 31, 2019, Lakehead will be able to deduct non-capital losses of $12,000 (maximum), provided the widget retailing business is carried on throughout the taxation year ended December 31, 2019, with a reasonable expectation of profit. D. For its year ending December 31, 2019, Lakehead will be able to deduct non-capital losses of $15,000 (maximum), provided the widget retailing business is carried on throughout the taxation year ended December 31, 2019, with a reasonable expectation of profit. is correct. For its year ending December 31, 2019, Lakehead Co. will be able to deduct non- capital losses of $15,000 (maximum), provided the widget retailing business is carried on throughout the taxation year ended December 31, 2019 with a reasonable expectation of profit. The correct answer is: For its year ending December 31, 2019, Lakehead will be able to deduct non-capital losses of $15,000 (maximum), provided the widget retailing business is carried on throughout the taxation year ended December 31, 2019, with a reasonable expectation of profit. Question 5 Correct Mark 1.00 out of 1.00 During 2019, Curran Ltd, a public corporation, has net income for tax purposes of $600,000, including $100,000 of dividends from taxable Canadian corporations and $500,000 of retailing profits. It made $200,000 of charitable donations during the year. Income earned in a province was 90% What is Curran Ltd's taxable income for the year? Select one: A. $600,000 B. $500,000 C. $400,000 D. $300,000 is correct. Net income for tax purposes . . . . $ 600,000 Canadian dividends . . . . . . . . . . . . . (100,000) Charitable donations . . . . . . . . . . . . (200,000) – not exceeding $450,000 (75% of net income) $ 300,000 The correct answer is: $300,000 3/4 9/14/2019 Question 6 Correct Mark 1.00 out of 1.00 Chapter 11 - Multiple Choice Questions: Attempt review Refer to the facts given in Question 5, above. What is Curran Ltd.'s federal tax payable for the year? Select one: a. $22,000 b. $48,000 is correct. Taxable income as per the answer to Question 5 . . . . . . . . . . . . . . . . . . .. . $300,000 Part I tax on taxable income Tax @ 38% on $300,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $114,000 Deduct: Federal tax abatement (10% x 90% x $300,000) . . . . . . . . . . . . . . . (27,000) $ 87,000 Deduct: 13% rate reduction (13% of $300,000) . . . . . . . . . . . . . . . . . . . . . . . . (39,000) Total federal tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $48,000 c. $87,000 d. $52,500 The correct answer is: $48,000 ◀ Announcements Jump to... Chapter 12 - Multiple Choice Questions ▶ 4/4 ...
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  • Taxation in the United States, Lakehead

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