Unformatted text preview: Problem 11-9 (Past exam question: 34 minutes) (Text: Ch. 11) Perfect Printer Ltd. commenced operations in 2009 and selected a December 31 year end. Due to the highly competitive nature of the printing business and the recession, it incurred losses in its first years of operation as follows: 2009 2010 Non-capital losses $300,000 $200,000* Net capital losses- 75,000 *includes an allowable business investment loss of $20,000 On June 1, 2011, 80% of the shares of Perfect Printer Ltd. were acquired by The Paper Factory Ltd., an arm's length party. The Paper Factory Ltd. has been in the business of manufacturing and distributing paper products for a number of years and has been very successful. The Paper Factory Ltd. will supply Perfect Printer Ltd. with a reliable supply of paper at a good price. It also intends to inject additional capital and augment the management of Perfect Printer Ltd. It is certain that it will be able to turn Perfect Printer Ltd.'s business around and make it profitable within 12 months.that it will be able to turn Perfect Printer Ltd....
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This note was uploaded on 03/24/2012 for the course ACCOUNTING IAF taught by Professor Ganesh during the Spring '12 term at Seneca.
- Spring '12