Thompson Enterprises Ltd. has taxable income of $100,000 before deducting CCA and taking account of...
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Accounting
Thompson Enterprises Ltd. has taxable income of $100,000 before deducting CCA and taking account of the following transactions.
1) Sold land for proceeds of $300,000. Thompson paid a 5% real estate commission on this sale. The land had an adjusted cost base of $175,000. Assume a capital gains inclusion rate of 50%.
2) Purchased class 8 assets (CCA rate of 20%) for a total cost of $50,000. Sold class 8 assets, which had an original capital cost of $40,000, for proceeds of $30,000. The opening balance of the class 8 UCC pool was $200,000.
3) Sold all of the assets in the class 10 pool (CCA rate of 30%) for proceeds of $50,000. These assets had an original cost of $60,000. The opening balance of the class 10 UCC pool was $40,000.
Determine the impact that each of the above-noted items will have on Thompsons taxable income and calculate Thompsons total taxable income for the year. Please find answers for each section, 1, 2 , and 3 and then add together to find the total taxable income for the year.
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