prob018 - Problem 18 (Text: Ch. 5) Golden Horseshoe...

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Problem 18 (Text: Ch. 5) Golden Horseshoe Manufacturing Ltd., incorporated in Ontario in 1972, manufactures widgets in a small community just north of Toronto. The following balances are reflected in the company’s books of account and tax records as at January 1, 2008. Book records Tax records Type of asset Rate of write-off Cost Book Value Class Balance Jan. 1, 2008 Brick building. ....................... 20 yr. $160,000 $24,000 3 $70,000 Equipment. ............................. — office. ......................... 10 yr 10,000 4,000 8 6,000 — manufacturing. ........... 5 yr. 65,000 28,000 43 27,000 Trucks (for transportation of goods) ......................................... 5 yr. 30,000 12,000 10 13,000 Leasehold improvements (Note (1)) ......................................... 13 yr. 24,000 21,176 13 19,500 Patent (Note (2)). ................... 17.5 yr 29,000 26,500 44 25,375 Trademark (Note (3)). ............ 5 yr. 10,000 6,000 n/a 6,500 Notes: (1) The leasehold improvement represents an improvement to a leased warehouse in
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prob018 - Problem 18 (Text: Ch. 5) Golden Horseshoe...

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