Question

In: Accounting

Schumann Inc. is a CCPC that has the following information for the current year: Canadian active...

Schumann Inc. is a CCPC that has the following information for the current year:

Canadian active business income                 $140,000

Dividend from a taxable Canadian corporation 15,000

Aggregate investment income                           60,000

Taxable income                                              200,000

Income eligible for the small business deduction 140,000

Part I tax payable for the year                           21,900

The refundable portion of Part I tax for the year is equal to:

A. $5,750.

B. $18,400.

C. $24,150.

D. $21,900.

Solutions

Expert Solution

The refundable portion of Part I tax for the year is equal to ( B. $18,400. ).

given,

Canadian active business income                 $140,000

Dividend from a taxable Canadian corporation 15,000

Aggregate investment income                           60,000

Taxable income                                              200,000

Income eligible for the small business deduction 140,000

Part I tax payable for the year                           21,900

The refundable portion of Part I tax for the year is following:

Refundable Portion of Part I Tax is the lesser of,

  1. 30 2/3% * Aggregate Investment Income (AII)
  2. 30 2/3 * (Taxable Income – Amount Eligible for the SBD)
  3. Part I Tax

Aggregate investment income X 30 2/3% = 60,000 X 30 2/3%

                                             =   $ 18400

Taxable income - Income eligible for the small business deduction =

    =200000-140000

   = 60000 X 30 2/3%= 18400

Lessser of Part I tax payable for the year                           21,900

ekkarill92 answered 1 year ago
Next > < Previous

Related Solutions

The accounting staff of Wyoming Outfitters, Inc., has assembled the following information for the current year...
The accounting staff of Wyoming Outfitters, Inc., has assembled the following information for the current year ended December 31. Cash and cash equivalents, Jan. 1 $ 35,800 Cash and cash equivalents, Dec. 31 120,900 Cash paid to acquire plant assets 23,000 Proceeds from short-term borrowing 10,000 Loans made to borrowers 4,300 Collections on loans (excluding interest) 4,000 Interest and dividends received 41,400 Cash received from customers 805,000 Proceeds from sales of plant assets 9,000 Dividends paid 54,000 Cash paid to...
The accounting staff of Wyoming Outfitters, Inc., has assembled the following information for the current year...
The accounting staff of Wyoming Outfitters, Inc., has assembled the following information for the current year ended December 31. Cash and cash equivalents, Jan. 1 $ 35,800 Cash and cash equivalents, Dec. 31 105,000 Cash paid to acquire plant assets 25,000 Proceeds from short-term borrowing 10,000 Loans made to borrowers 4,400 Collections on loans (excluding interest) 4,000 Interest and dividends received 27,600 Cash received from customers 795,000 Proceeds from sales of plant assets 9,000 Dividends paid 44,000 Cash paid to...
The accounting staff of Wyoming Outfitters, Inc., has assembled the following information for the current year...
The accounting staff of Wyoming Outfitters, Inc., has assembled the following information for the current year ended December 31. Cash and cash equivalents, Jan. 1 $ 35,800 Cash and cash equivalents, Dec. 31 137,700 Cash paid to acquire plant assets 22,000 Proceeds from short-term borrowing 10,000 Loans made to borrowers 4,200 Collections on loans (excluding interest) 4,000 Interest and dividends received 42,100 Cash received from customers 815,000 Proceeds from sales of plant assets 9,000 Dividends paid 45,000 Cash paid to...
If a taxpayer has the following for the current year: Active Portfolio Passive Income Income Income...
If a taxpayer has the following for the current year: Active Portfolio Passive Income Income Income Income $75,000 $22,000 $55,000 Deductions (45,000) (16,000) (110,000) Income(Loss) $30,000 $6,000 $(55,000) ​ I. If the taxpayer is a regular corporation, taxable income from the three activities is a loss of $19,000. II. If the taxpayer is an individual and the passive income is related to a rental real estate activity in which the taxpayer is an active participant, taxable income is $11,000. ​...
Pronghorn Inc. and Culver Corporation are Canadian fertilizer companies. The following information has been taken from...
Pronghorn Inc. and Culver Corporation are Canadian fertilizer companies. The following information has been taken from their financial statements for the fiscal years ended December 31. All figures are in millions of dollars. CULVER 2021 2020 2019 Net sales $8,862.0 $4,544.1 $3,049.5 Gross profit 5,228.1 1,885.0 1,053.4 Profit 3,534.2 1,167.0 675.0 PRONGHORN 2021 2020 2019 Net sales $9,217 $5,710 $4,306 Gross profit 3,590 1,694 885 Profit 1,193 410 36 1) Calculate both companies’ gross profit margin and profit margin for...
ABC Infinity is a CCPC with the following​ information: Capital Dividend account balance on January 1...
ABC Infinity is a CCPC with the following​ information: Capital Dividend account balance on January 1 of the current​ year:$37,680 During the current​ year, the company had the following​ transactions: Capital Gains of $9,000 Capital Dividends received of $4,000 Net Income for Tax Purposes of $88,000 ​Non-Eligible Dividends paid of $19,500 What is the balance in the capital dividends account at the end of the current​ year? Choose the correct answer. A. $37,680 B. $26,680 C. $114,680 D. $46,180
Corporate Tax Payable with M&P Zenox Ltd. is a Canadian controlled private corporation (CCPC) with all...
Corporate Tax Payable with M&P Zenox Ltd. is a Canadian controlled private corporation (CCPC) with all of its operations located in Saskatchewan. Sharon Zenox owns 100 percent of the outstanding shares of this Company. At the beginning of 2017, the Company has a non-capital loss carry forward of $54,000. The Company intends to deduct this carry forward during the year. For the 2017 taxation year, Zenox has Net Income For Tax Purposes of $625,000. This is made up of $523,000...
Which of the following is NOT one of the criteria for a CCPC to be considered...
Which of the following is NOT one of the criteria for a CCPC to be considered a small CCPC eligible to pay instalments on a quarterly basis? Taxable income cannot exceed $500,000 for the corporation and its associated corporations for the current taxation year and the two previous years. The corporation has claimed the small business deduction in the current or previous year. The corporation has a perfect compliance record during the last 12 months. The corporation and its associated...
YYZ has the following financial information: Current Year Prior Year # Units in Beginning Inventory ?...
YYZ has the following financial information: Current Year Prior Year # Units in Beginning Inventory ?                    0   # Units Sold        570,000         580,000 # Units Manufactured (Actual)        610,000         590,000 # Units Manufactured (Budget)        640,000         600,000 Selling Price (per unit)            10.00               9.90 Variable Manufacturing Costs (per unit)              5.00               4.80 Variable Sales+Admin Costs (per unit)              1.00               1.00 Fixed Manufacturing Costs (Budget and Actual) (total)     1,600,000      1,560,000 Fixed sales+admin...
. Ledger Properties has the following financial information: Current Year Prior Year Revenues $ 48,915 $...
. Ledger Properties has the following financial information: Current Year Prior Year Revenues $ 48,915 $ 43,610 Administrative expenses 12,106 11,602 Interest expense 816 468 Cost of goods sold 29,715 26,309 Depreciation 1,408 1,387 Net fixed assets 32,711 31,984 Current liabilities 14,652 14,625 Common stock 15,000 14,000 Current assets 16,506 14,687 Long-term debt 12,200 ? Retained earnings 7,365 4,246 Dividends paid 290 275 What is the cash flow of the firm for the current year if the tax rate is...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT