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Yellow Ltd. is engaged in manufacturing and processing, which is 95% of their business, with a December 31 year-end. On January 1, 2023, the balances with regards to capital assets were as follows: Class 10.1 - automobile UCC 17,850 Cost 34,000 NBV 12,000 During 2023, the automobile was sold for $21,000. A new automobile was purchased for $45,200, which included HST of $5,200 (13%). Required: Determine the tax consequences to Yellow Ltd. that result from the automobiles in 2023, including the UCC balance for January 1, 2024. (8 marks, 11 minutes)

Yellow Ltd. is engaged in manufacturing and processing, which is 95% of their business, with a December 31 year-end. On January 1, 2023, the balances with regards to capital assets were as follows: Class 10.1 - automobile UCC 17,850 Cost 34,000 NBV 12,000 During 2023, the automobile was sold for $21,000. A new automobile was purchased for $45,200, which included HST of $5,200 (13%). Required: Determine the tax consequences to Yellow Ltd. that result from the automobiles in 2023, including the UCC balance for January 1, 2024. (8 marks, 11 minutes)

FINANCIAL ACCOUNTING
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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Yellow Ltd. is engaged in manufacturing and processing, which is 95% of their business, with a December 31 year-end. On January 1, 2023, the balances with regards to capital assets were as follows: Class 10.1 - automobile UCC 17,850 Cost 34,000 NBV 12,000 During 2023, the automobile was sold for $21,000. A new automobile was purchased for $45,200, which included HST of $5,200 (13%). Required: Determine the tax consequences to Yellow Ltd. that result from the automobiles in 2023, including the UCC balance for January 1, 2024. (8 marks, 11 minutes)
Transcribed Image Text:Yellow Ltd. is engaged in manufacturing and processing, which is 95% of their business, with a December 31 year-end. On January 1, 2023, the balances with regards to capital assets were as follows: Class 10.1 - automobile UCC 17,850 Cost 34,000 NBV 12,000 During 2023, the automobile was sold for $21,000. A new automobile was purchased for $45,200, which included HST of $5,200 (13%). Required: Determine the tax consequences to Yellow Ltd. that result from the automobiles in 2023, including the UCC balance for January 1, 2024. (8 marks, 11 minutes)
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