CORPORATION BASIC DEMONSTRATION PROBLEM
Management of Grizzley Limited has provided the following information related to the
taxation year ended Dec. 31, 20X5. Grizzley is a non-manufacturer located in the
province in which you live.
(a) Income Statement
Cost of Sales
Pre-Tax Net Income
(b) Donations include a payment to the Liberal Party of Canada in the amount of
$3,000, a cultural gift of $2,000, and $2,000 to registered Canadian charities.
(c) The dividends are from:
A taxable Canadian corporation
An American company (net of $1,000* U.S. tax)
*The $1,000 and $5,000 are in Canadian funds.
N.B. The American company is not a foreign affiliate, and did not
carry on business in Canada.
(d) Capital cost allowance for the year is $65,000.