Exam 11: Corporations-An Introduction

Johnson Co.is a CCPC with active business income of $350,000 in 20X2.The company engages in retail and wholesale activities.Capital gains in 20X0 were $84,000. Johnson Co.will utilize a net capital loss carry-over of $28,000 on its 20X2

The Stevens Company is a public Canadian corporation that is primarily engaged in manufacturing.The company's head office is located in Saskatchewan.In 20X1,a small branch was established in Manitoba,to be used for sales purposes only. In 20X2,the company's books showed the following: Required: A)Calculate the company's net income for tax purposes for 20X2. B)Calculate the company's taxable income,both federal and provincial.(Round all number to two decimal places.) C)Calculate the manufacturing and processing profits for the company. D)Calculate the federal tax liability.(Round all numbers to zero decimal points.)

Bride and Groom Co.is a Canadian controlled private corporation with active business income of $750,000.The company is in the business of producing and selling bridal wear.Dividends were received from a taxable Canadian corporation in the amount of $80,000. Additional information is as follows: Net capital loss carry-over balance is $200,000. Non capital loss carry-over balance is $70,000. Required: Calculate the minimum federal Part I tax payable by Bride and Groom Co.

Using general terms,explain how a change in control of a corporation can affect the net-capital losses and the non-capital losses.

The Canadian tax system practices integration between corporations and individuals.Using the data in Table 1 and assumed rates,illustrate and explain the concept of integration. Table 1

Which of the following statements accurately describes the tax treatment for Canadian corporations?

Many corporations carry on business in more than one province.Assuming a corporation from Province A wishes to conduct business in Province B,the corporation will not have to pay tax in Province B if:

Which of the following is false with regard to dividends,corporations,and shareholders?

When shares are transferred from one group of shareholders to another and there is a change in control,which of the following is correct?

In 20X0,Coffee Co.recognized $37,000 in business income and $1,000 in taxable capital gains.In 20X1,the company incurred a business loss of $25,000,a taxable capital gain of $2,000,and an allowable capital loss of $5,000.Business income for 20X2 was $50,000,taxable capital gains were $4,000,and the company received $10,000 in dividends from a taxable Canadian corporation.Assuming Coffee Co.utilizes any unused losses in the earliest years possible,which of the following taxable incomes are correct,after all carry-over adjustments have been made?