sol12-14 - Problem 12-14S SOLUTION (Past exam question: 54...

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Problem 12-14S SOLUTION (Past exam question: 54 minutes) Schedule 1 Net income for the year $ 496,900 Add: Income taxes $ 200,000 Amortization - cost of sales 128,000 - rental 3,000 - other 12,000 Charitable donations 2,000 Meals and entertainment (note 1) 15,500 Unpaid bonuses - employee 40,000 - shareholder 110,000 Restructuring cost (a reserve) 50,000 Write-down of investments 25,000 Loss of disposition of equipment 9,000 Dividend - Make-it and Save-it (Alberta) Inc. 60,000 654,500 1,151,400 Deduct: Inventory write-down 10,000 Capital cost allowance (note 2) - Cl. 1 8,000 - Cl. 3 3,000 - Cl. 8 4,000 - Cl. 10 6,000 - Cl. 29 26,250 - Cl. 43 58,200 Gain on disposition of Plant #1 1,300,000 Income from Make-it and Save-it (Alberta) Inc. 100,000 (1,515,450 ) (364,050) Taxable capital gains (note 3) 525,000 Net income 160,950 Dividends (note 4) (115,000) Donations (2,000 ) Taxable income $ 43,950 Page 1 of 6
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Problem 12-14S (Cont.) Income Analysis Dividends ------------------------------------ ABI AII Connected Portfolio Total Securities $5,000 $ 5,000 Make-it-Rich $50,000 50,000 Make-it and Save-it 60,000 60,000 Rental $ 30,400 30,400 TCG 525,000 525,000 Interest 7,500 7,500 ABI (Balance)
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sol12-14 - Problem 12-14S SOLUTION (Past exam question: 54...

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