You are the tax consultant for Deferit Ltd., a wholesale company which has a December 31 year-end. Theowner-manager of the corporation wants to minimize Deferit's income for tax purposes. You are given thefollowing information.In June 2022, Deferit replaced a building in Class 1 (the only asset in the class) destroyed by fire in 2021with another building (new and unused non-residential building) that cost $600,000. Insurance proceeds of$400,000 were received in May 2021. The original cost in 2011 of the destroyed building was $350,000.This was the only capital asset transaction in 2021 and 2022. The undepreciated capital cost of Class 1 atthe beginning of 2021 was $238,000.Required:Compute the minimum income that must be reported for the corporation's 2021 taxation year after theabove disposition and purchase transactions have taken place. Indicate the ACB and the UCC, before CCA,of the new building.

Describing the minimum income disclosure required by the corporation for the tax year 2021 involves…

Required: Compute the minimum income that must be reported for the corporation's 2021 taxation year after the above disposition and purchase transactions have taken place. Indicate the ACB and the UCC, before CCA, of the new building.

Required: Compute the minimum income that must be reported for the corporation's 2021 taxation year after the above disposition and purchase transactions have taken place. Indicate the ACB and the UCC, before CCA, of the new building.

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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Subject:
Increases in the effect of asset ceiling are recognized in full during the year in other comprehensive income recognized in full in the following year in other comprehensive income amortized over the remaining average service lives of the plan participants partly recognized in profit or loss and other comprehensive income