prob12-21 (fall 2011 final review)

prob12-21 (fall 2011 final review) - Problem 12-21 (Text:...

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Problem 1 2-21 (Text: Ch. 12) The schedule below outlines the net income for income tax purposes (by source) of Moon Ray Inc. (MRI), a Canadian-controlled private corporation wholly owned by Ms. Sun, for its fiscal year ended December 31, 2011. The Toronto-based company develops and manufactures software for use in aeronautical instrument panels. Moon Ray Inc. Net Income for Income Tax Purposes (by source) For the year ended December 31, 2011 Income from manufacturing, net of all capital cost allowance $150,000 Interest income 10,000 Dividend income 8,000 Taxable capital gain 3,000 Net income for income tax purposes $171,000 Additional Information: 1. Interest income is derived from the following sources: (a) 10-year bond in Neptune Ltd., a Canadian company $ 1,000 (b) Bank interest from seasonal investment of cash 1,000 (c) Interest from loan to Pluto Limited 2,000 (d) Interest on a long-term loan to Saturn U.S. Limited in Canadian dollars (before foreign tax paid of $900) 6,000 $ 10,000
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prob12-21 (fall 2011 final review) - Problem 12-21 (Text:...

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