,Hello there, I am a course hero member. can you help me solve these two problems by Monday morning august 10th,Question 1 ,FortheyearendingDecember31,2013, the Income Statement of MarkhamLtd.,prepared in accordance with generally accepted accounting principles, is as follows: ,Revenues $973,000 ,Expenses: ,Cost Of Goods Sold ($272,000) ,Selling And Administrative Costs ( 132,000) ,Amortization Expense ( 156,000) ,Other Expenses ( 137,000) ( 697,000) ,Income Before Tax Expense $276,000 ,Income Tax Expense: ,Current ($ 97,000) ,Future ( 32,000) ( 129,000) ,Net Income $147,000 ,Other Information: 1. The Company spent $6,000 during the year on landscaping for its new building. For ac- counting purposes this was treated as an asset. The Company will not amortize this balance as it believes the work has an unlimited life. ,2. Selling And Administrative Costs include $15,000 in business meals and entertainment. ,3. Other Expenses include contributions to registered charities of $3,700. ,4. As the Company expects to issue more shares during 2014, it made a number of amend- ments to its articles of incorporation and included the legal costs in Other Expenses. These costs totalled $6,000. ,5. During 2012, Markham Ltd. acquired a competing business at a price that included good- will of $70,000. For accounting purposes, there is no impairment or write-down of the goodwill purchased in either year. , 6. Other Expenses includes bond discount amortization of $2,500. ,7. Selling And Administrative Costs include membership fees for several employees in a local golf and country club. These fees total $3,400. ,8. On January 1, 2013, the Company had the following UCC balances: ,Class 1 $400,000 ,Class 8 575,000 ,Class 10 45,000 ,Class 13 68,000 ,TheClass1 balance relates to a single building acquired in2000 at a cost of$550,000.Itis estimated that the value of the land at this time was $50,000. On February 1, 2013, this building is sold for $612,000. It is estimated that the value of the land is unchanged at $50,000. In the accounting records, this real property was carried at $507,000, $457,000 for the building and $50,000 for the land. The resulting gain on the building is included in the accounting revenues. The old building is replaced on February 15, 2013 with a new building acquired at a cost of $683,000 of which $60,000 is allocated to land. The Company chose not to put the new building into a separate Class 1 so it does not qualify for the 6 percent CCA rate. No elections are made with respect to the replacement of the building. ,There are no dispositions of Class 8 assets during the year. However, there are acquisitions in the total amount of $126,000. As the Company has decided to lease all of its vehicles in the future, all of the assets in Class 10 are sold during the year. The capital cost of these assets was $93,000 and the pro- ceeds of disposition amounted to $37,000. The net book value of these assets was $52,000andtheresultingaccountinglossof$15,000wasincludedinOtherExpenses. The Class 13 balance relates to a single lease that commenced on January 1, 2011. The lease has an initial term of seven years, with two successive options to renew for three years each. Expenditures on this leasehold were $50,000 in 2011 and $27,000 in 2012. There were no further expenditures in 2013. The write-off of these expenditures for ac- counting purposes is included in Amortization Expense. ,9. Other Expenses includes interest on late income tax instalments of $500 and on late mu- nicipal tax payments of $275. ,10. Markham Ltd. deducts maximum CCA. ,Required: Determine Markham Ltd.’s 2013 minimum Net Income For Tax Purposes. In addition, calculate the January 1, 2014 UCC for each CCA class. Indicate why you have excluded some items from your calculations. ,Question 2 ,For the taxation year ending December 31, 2013, Voxit Inc. recorded Net Income of $565,000. This amount was determined under generally accepted accounting principles. ,1. Other Information: ,The following items were deducted (added) during the year: , Current Income Tax Expense $210,000 , Future Income Tax Benefit ( 23,000) ,Interest Expense (Includes $3,500 In Discount Amortization) 22,000 ,Interest On Deficient Corporate Tax Instalments 1,250 ,Reserve For Inventory Declines 12,600 ,Amortization Expense 51,500 ,Charitable Donations 14,500 ,Cost Of Sponsoring Local Soccer Team 4,600 , Loss From Employee Theft 5,200 ,Loss On The Sale Of Vehicles 36,200 , Cost Of Appraisal Of Building To Be Sold 2,600. , ,2. On January 1, 2013, the Company has the following , UCC balances: Class 1 (All Assets Acquired in 2005) $325,236 ,Class 8 226,964 ,Class 10 87,468 , Class 13 29,322 ,During the year ending December31,2013, the Company acquired furniture and fixtures at a cost of $262,000. Furniture and fixtures with a cost of $275,000 and a fair market value of $189,000 were traded in on the new assets. The balance in Class 10 reflects the Company’s fleet of delivery vehicles. In the accounting records, their net book value was $92,700. During the year ending December 31, 2013, all of these vehicles were sold and replaced with leased vehicles. The sale proceeds amounted to $56,500, with the amount received for each vehicle being less than its cost. The Class 13 assets relate to a lease that was signed on January 1, 2009. At that time, the cost of the improvements on the leased property was $36,400. The basic term of the lease is 10 years and there are two 4 year renewal options. Prior to 2013, all the computer equipment was leased. During 2013, computer equipment and systems software was purchased for $20,000. ,3. On January 1, 2013, the Company had no CEC balance. On that date, the Company sold one of its divisions. The sale proceeds included a payment for internally generated good- will of $43,000. On December 31, 2013, the Company acquired an unincorporated business. The purchase price included a $55,000 payment for goodwill. As the acquisition was late in the year, none of the acquired assets were amortized for accounting purposes. ,Required: Calculate Voxit Inc.’s minimum Net Income For Tax Purposes for the year ending December 31, 2013. ,
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