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Adventure Place Inc. had the following accounting income for the year ended December 31, 2019: Revenue Cost of goods sold Gross profit Operating expenses Amortization Miscellaneous expenses Operating income Gain on sale of investments $1,725,000 1,185,000 540,000 (265,000) (98,000) (76.000) 101,000 23.000

Adventure Place Inc. had the following accounting income for the year ended December 31, 2019: Revenue Cost of goods sold Gross profit Operating expenses Amortization Miscellaneous expenses Operating income Gain on sale of investments $1,725,000 1,185,000 540,000 (265,000) (98,000) (76.000) 101,000 23.000

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Adventure Place Inc. had the following accounting income for the year ended December 31, 2019: $1,725,000 1,185,000 540,000 (265,000) (98,000) |(76.000) 101,000 23.000 $ 124.000 Revenue Cost of goods sold Gross profit Operating expenses Amortization Miscellaneous expenses Operating income Gain on sale of investments Accounting income Included in operating expenses are: $9,500 in meals and entertainment expenses related to client marketing - $7,800 for membership in a local golf club, which is used to bring in clients - $20,000 in corporate income tax instalment payments Included in miscellaneous expenses are: $4,800 in legal costs paid as part of a working capital loan obtained during the year $5,600 for donations to charities $1,400 in interest and penalties on late income taxes $700 in interest on late municipal tax payments At the beginning of 2019, Adventure Place Inc. had undepreciated capital cost balances of:
Transcribed Image Text:Adventure Place Inc. had the following accounting income for the year ended December 31, 2019: $1,725,000 1,185,000 540,000 (265,000) (98,000) |(76.000) 101,000 23.000 $ 124.000 Revenue Cost of goods sold Gross profit Operating expenses Amortization Miscellaneous expenses Operating income Gain on sale of investments Accounting income Included in operating expenses are: $9,500 in meals and entertainment expenses related to client marketing - $7,800 for membership in a local golf club, which is used to bring in clients - $20,000 in corporate income tax instalment payments Included in miscellaneous expenses are: $4,800 in legal costs paid as part of a working capital loan obtained during the year $5,600 for donations to charities $1,400 in interest and penalties on late income taxes $700 in interest on late municipal tax payments At the beginning of 2019, Adventure Place Inc. had undepreciated capital cost balances of:
At the beginning of 2019, Adventure Place Inc. had undepreciated capital cost balances of: Class 1 building used more than 90% for office space, acquired in 2009 – $348,670 Class 8 small tools and equipment – $267,780 Class 10 vehicles – $98,413 During the year, $25,600 in small tools were purchased for use in regular operations. Two Člass 10 vehicles were disposed of during the year for proceeds of $17,500 each. Each of the vehicles had an original cost of $30,000. Investments with a cost of $60,000 were sold during the year for $83,000. Adventure Place Inc. had a net capital loss carryforward balance of $52,400 at the beginning of the year. Required: Beginning with accounting income, and adjusting as needed, calculate the minimum net income for tax purposes and taxable income for Adventure Place Inc. for 2019.
Transcribed Image Text:At the beginning of 2019, Adventure Place Inc. had undepreciated capital cost balances of: Class 1 building used more than 90% for office space, acquired in 2009 – $348,670 Class 8 small tools and equipment – $267,780 Class 10 vehicles – $98,413 During the year, $25,600 in small tools were purchased for use in regular operations. Two Člass 10 vehicles were disposed of during the year for proceeds of $17,500 each. Each of the vehicles had an original cost of $30,000. Investments with a cost of $60,000 were sold during the year for $83,000. Adventure Place Inc. had a net capital loss carryforward balance of $52,400 at the beginning of the year. Required: Beginning with accounting income, and adjusting as needed, calculate the minimum net income for tax purposes and taxable income for Adventure Place Inc. for 2019.
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