Tax 1 -CGA
Problem (Comprehensive Corporate Tax Payable)
Startop Ltd. is a Canadian controlled private corporation that was established in Manitoba in
2009. For the year ending December 31, 2010, its accounting Net Income Before Taxes, as
determined under generally accepted accounting principles, was $462,000. Other information
for the 2010 fiscal year follows.
Startop sold depreciable assets for $450,000. These assets had an original cost of
$390,000 and a net book value of $330,000. They were Class 8 assets and, at the
beginning of 2010, the balance in this class was $350,000. The Company has other
assets left in this class at the end of the year.
The Company’s amortization expense was $546,000. Maximum deductible CCA for the
year was $730,000.
The Company spent $50,000 on business meals and entertainment.