Globe Inc. (a public corporation) had a Class 10 undepreciated capital cost (UCC) balance of $12,000 at the end of 2021. The onlyasset in the pool (a small pickup truck) was sold on December 20th of 2022 for $5,000. On the same day. Globe purchased a newtruck for $8,000. How much CCA can Globe claim in 2022? (The maximum CCA is always claimed by Globe Inc.)Multiple ChoiceO $1,350$3,600$4,950

Capital Expenditure (CCA) is a Canadian tax mechanism that allows businesses to deduct capital costs…

Answered: Globe Inc. (a public corporation) had a…

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

Problem 1PS

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Assume that today is December 31, 2022, and the following information applies to XavierAirlines:-After-tax operating income [EBIT (1 - T)] for the just ended year is $900 million.-The depreciation expense for the just ended year was $140 million.-The capital expenditure for the just ended year was $225 million.-There was no change in net operating working capital from the previous year.-Analysts estimate that Xavier’s free cash flow is expected to grow on average, at a rate of8% per year for the next 5 years after which growth is expected to moderate to 4% at aconstant rate.-The weighted average cost of capital (WACC) for Xavier is 10%.-The market value of the company's debt is $2.875 billion.-Xavier has 300 million shares of stock are outstanding.Using the corporate valuation model approach, what should be:a. The value of Xavier Airlines today (the firm)?b. The value of Xavier Airlines’ Common Equity?c. The intrinsic value of Xavier’s stock price today?
A firm purchased $62,800 of fixed assets two years ago. The company no longer needs these assets so it is going to sell them today for $28,500. The assets are classified as five-year property for MACRS. The MACRS rates are .2, .32, .192, .1152, .1152, .0576, for Years 1 to 6, respectively. What is the net cash flow from this sale if the firm's tax rate is 23 percent and no bonus depreciation is taken? $29,281.04 $26,576.00 $28.878.12 $27,516.60 O $29,648.12
Excelsior Corporation has the following headings on its December 31, 2019 Balance Sheet: Total Current Assets $200,000 Total Assets $500,000 Total Current Liabilities $91,500 Total Non Current Liabilities $300,000 On January 2020 Excelsior pays off $36,900 in long term debt by transferring title to one of its idle factories to the creditor Required 1: Assume no other transaction in 2020. How much will working capital increase/decrease by when comparing December 2019 with January 2020? $ Required 2: The current ratio of 2019 is: Required 3: Excelsior's financial leverage in 2019 is (calculate it as a debt to equity ratio): Required 4: Excelsior's financial leverage in 2019 is (calculate the Equity Ratio and not the Equity Ratio percentage): Required 5: If sales for 2019 amount to $570,000, the working capital turnover for 2019 is:
What are the amounts capitalized for: Land, Building, Equipment, Furniture, and Land Improvements?
On July 1, 2018, Apache Company, a real estate developer, sold a parcel of land to a construction company for $4,200,000. The book value of the land on Apache's books was $1,800,000. Terms of the sale required a down payment of $300,000 and 13 annual payments of $300,000 plus interest at an appropriate interest rate due on each July 1 beginning in 2019. How much revenue will Apache recognize for the sale (ignoring interest), assuming that it recognizes revenue at the point in time at which it transfers the land to the construction company? (Leave no cells blank - be certain to enter "O" wherever required.) 2018 2019 Revenue
ABC Limited located in a country which has capital gains tax, conducted the following transactions: Purchased a building in February 2018 for $26,000,000. In March 2019, the company spent $2,800,000 to install solar panels for electricity in the building. The building was sold for $40,000,000 in 2021. The annual maintenance cost was $500,000. The cost of advertising the sale of the building and the legal fees amounted to $1,200,000. A motor vehicle was purchased for $5 million on January 1, 2018. The vehicle was sold in 2021 for $4.5 million. Bought an antique painting for $3.5 million in 2019. The painting was sold in 2021 for 1million. Purchased a government bond for $5,000,000 in 2018 and sold it for $7,500,000 in 2021. The company is entitled to an Annual Exemption of $500,000. Capital losses as of 1 January 2021 was $1,500,000. Calculate the capital gains tax in 2021, assuming a capital gain tax of 20%. $2,000,000 $1,400,000 $1,100,000 $600,000
On January 1, 2018, Ameen Company purchased major pieces of manufacturing equipment for a total of $36 million. Ameen uses straight-line depreciation for financial statement reporting and MACRS for income tax reporting. At December 31, 2020, the book value of the equipment was $30 million and its tax basis was $20 million. At December 31, 2021, the book value of the equipment was $28 million and its tax basis was $12 million. There were no other temporary differences and no permanent differences. Pretax accounting income for 2021 was $50 million. Required: 1. Prepare the appropriate journal entry to record Ameen's 2021 income taxes. Assume an income tax rate of 25%. 2. What is Ameen's 2021 net income?
Pearl Limited purchased an asset at a cost of $20,000 on March 1, 2023. The asset has a useful life of seven years and an estimated residual value of $2,200. For tax purposes, the asset belongs in CCA Class 8, with a rate of 20%. (a) Calculate the CCA for each year, 2023 to 2026, assuming Pearl's asset is eligible for the Accelerated Investment Incentive, and that this is the only asset in Class 8. 2023 2024 2025 2026 2024 2025 CCA 2026 $ TA (b) How would the calculation for each year from 2024 to 2026 change if the asset had been purchased in 2024? $ $ $ tA tA $ CCA
Rushmore Ltd., with a tax year that ends on Dec 31, has a class 10 (30%) UCC balance on January 1, 2020 of $41000. During 2020, it acquired 20 class 10 cars that are eligible for the accelerated investment incentive. The total cost of all the cars was $180000. The Company also disposes of 15 cars for total proceeds of $51000. In no case did the proceeds of disposition exceed the capital cost of the vehicle being disposed of. Determine the maximum Class 10 CCA that Rushmore Ltd. can deduct for 2020. Round to the nearest dollar. Do NOT write commas, dollar signs, or decimals in your response.
In 2023, BayKing Company sold used equipment for $20,000. The equipment had an original cost of $90,000 and accumulated depreciation as of the date of sale was $69,000. BayKing also purchased held-to-maturity securities for $7,000. What is the gain or loss on the sale of the equipment? Group of answer choices $21,000 gain $1000 loss $14,000 loss $34,000 gain
What is the answer and how do you get the answer? Dixon Development began operations in December 2021. When lots for industrial development are sold, Dixon recognizes income for financial reporting purposes in the year of the sale. For some lots, Dixon recognizes income for tax purposes when collected. Income recognized for financial reporting purposes in 2021 for lots sold this way was $15 million, which will be collected over the next three years. Scheduled collections for 2022–2024 are as follows: 2022 $ 5 million 2023 7 million 2024 3 million $ 15 million Pretax accounting income for 2021 was $20 million. The enacted tax rate is 30%. Required:1. Assuming no differences between accounting income and taxable income other than those described above, prepare the journal entry to record income taxes in 2021.2. Suppose a new tax law, revising the tax rate from 30% to 25%, beginning in 2023, is enacted in 2022, when pretax accounting income was $17…
Excelsior Corporation has the following headings on its December 31, 2019 Balance Sheet: Total Current Assets $200,000 Total Assets $500,000 Total Current Liabilities $169,000 Total Non Current Liabilities $300,000 On January 2020 Excelsior sells temporary investments to pay off $56,400 in long term debt Required 1: How much will working capital increase (decrease) by when comparing December 2019 with January 2020? Required 2: If no other transaction took place in January 2020, the current ratio at the end of January 2020 is: Required 3: If no other transaction took place in January 2020, the debt to equity ratio at the end of January 2020 is: Required 4: If no other transaction took place in January 2020, the financial leverage in January 2020 is (calculate the Equity Ratio and not the Equity Ratio percentage): Required 5: If last 12 month sales as of January 2020 amount to $480,000, the working capital turnover for the period ended January 31st 2020 is:

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