ACCT385 Assignment 3: Non Textbook Problems Complete Solution
Assignment 3: Non-Textbook Problems
Do not forget to do the textbook problem as well: AP6-13
A3P1
The Catnip Co. is a Canadian controlled private corporation. The company reports the following information for its December 31, 2014 fiscal year-end:
Active Business Income earned in Canada $410,000
Capital Gains 76,000
Interest Income 5,000
Dividend from Cougar Co., a connected corporation 31,200
Dividends from non-connected corporations 18,000
Additional Information:
Year 2013: $72,000 Year 2014: $90,000
5. Cougar Co. paid $78,000 in dividends in 2014 and received a dividend refund of $21,000
6. Catnip Co. had a balance of $16,000 in its RDTOH account at 31/12/13.
Required:
Compute Catnip Co.’s 2014:
A3P2
Mr. Puma has disposed of several properties in the year and is seeking your advice. The details are as follows:
|
Date of purchase |
|
Selling price |
||||
Regina home..................... |
2003 |
$ 400,000 |
$ 517,500 |
|
|||
Cottage............................... |
2008 |
250,000 |
375,000 |
|
|||
Required:
Compute the capital gain of the above dispositions, taking into account that he would like to minimize the amount of capital gains on the dispositions.
|
Cost |
Proceeds |
Antique car................................. |
15,000 |
10,000 |
Antique chair.............................. |
300 |
1,200 |
Antique table.............................. |
1,500 |
2,000 |
Required:
He would like you to advise him on the tax consequences of the above dispositions.
A3P2 – Cont’d
Required:
Mr. Leopard would like spread the amount of tax that he would have to pay over the longest period of time. Advise him on the course of action as well as the amount of gain that he would have to report for the current year.
Required:
Provide Mr. Undecided with the appropriate advice.
ACCT385 Assignment 3: Non-Textbook Problems Complete Solution
(a) 1/3 of all assessable dividends received in the year by a recipient corporation from payer corporations with which it is not connected and 1/3 of 18,000 = 6,000 (b) the total of each amount in respect of an ass...
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