CorpBasicDemo

CorpBasicDemo - 1 CORPORATION BASIC DEMONSTRATION PROBLEM...

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1 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 Sales $1,200,000 Cost of Sales 400,000 Gross Margin 800,000 Other Expenses Advertising $25,000 Depreciation 40,000 Donations 7,000 Office Supplies 20,000 Rent 80,000 Salaries 100,000 272,000 Operating Income 528,000 Other Income Interest 40,000 Dividends 10,000 50,000 Pre-Tax Net Income $578,000 (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 $5,000 An American company (net of $1,000* U.S. tax) $5,000* *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.
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This note was uploaded on 01/07/2012 for the course ACCT 4453 taught by Professor Gorman during the Spring '11 term at Dalhousie.

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CorpBasicDemo - 1 CORPORATION BASIC DEMONSTRATION PROBLEM...

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