The Honeymoon Co. is a Canadian controlled private corporation with active business income of $750,000 in 2020. Dividends were received during 2020 from ataxable Canadlan corporation in the amount of $80,000. The company recognized a $50,000 capital gain during 2020. The company's year-end is December 313t.Additional Information is as followsNet capital loss carry-over from 2019 is $30,000.Non capital loss carry-over from 2019 is $70,000.Required:Calculate the following for the company for the 2020 tax yearA. Net income for tax purposesB Taxable incomeC. Part I Federal Tax - Identify amounts for 1) basic federal tax, 2) federal abatement, 3) refundable tax on investment income, 4) small business deduction, 5) generalrate reduction), and 6) the total federal tax.

Pay as you earn system or tax deduction at source in some countries are the advance tax payment…

Answered: Net capital loss carry-over from 2019…

Net capital loss carry-over from 2019 is $30, Non capital loss carry-over from 2019 is $70 Required Calculate the following for the company for A. Net income for tax purposes B. Taxable income

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.

Question

The Honeymoon Co. is a Canadian controlled private corporation with active business income of $750,000 in 2020. Dividends were received during 2020 from a
taxable Canadlan corporation in the amount of $80,000. The company recognized a $50,000 capital gain during 2020. The company's year-end is December 313t.
Additional Information is as follows
Net capital loss carry-over from 2019 is $30,000.
Non capital loss carry-over from 2019 is $70,000.
Required:
Calculate the following for the company for the 2020 tax year
A. Net income for tax purposes
B Taxable income
C. Part I Federal Tax - Identify amounts for 1) basic federal tax, 2) federal abatement, 3) refundable tax on investment income, 4) small business deduction, 5) general
rate reduction), and 6) the total federal tax.

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