PROBLEM FIVE Wrap Ltd. is a Canadian-controlled private corporation. At the end of 2022, Wrap had the following tax account balances. Non-capital losses $ 8,000 Net capital losses 2,000 Non-eligible RDTOH 7,000 Dividend refund from non-eligible dividends 1,000 CDA 12,000 For the current year, 2023, net income for tax purposes is $261,000. Included in this amount is the following. Income from an active business carried on in Canada $200,000 Taxable capital gain 6,000 Eligible dividends from Canadian public companies 15,000 Canadian bond interest 40,000 The following is a summary of other information for Wrap Ltd. for the 2023 year. Taxable income Required: $236,000 Capital dividend paid 12,000 Eligible dividend paid 10,000 Non-eligible dividend paid 75,000 Small business deduction 38,000 Total Federal Part I tax payable 31,920 Determine the dividend refund for 2023. Would the dividend refund change if Wrap Ltd. was not a CCPC but instead was a private corporation or a public corporation? Page 498
PROBLEM FIVE Wrap Ltd. is a Canadian-controlled private corporation. At the end of 2022, Wrap had the following tax account balances. Non-capital losses $ 8,000 Net capital losses 2,000 Non-eligible RDTOH 7,000 Dividend refund from non-eligible dividends 1,000 CDA 12,000 For the current year, 2023, net income for tax purposes is $261,000. Included in this amount is the following. Income from an active business carried on in Canada $200,000 Taxable capital gain 6,000 Eligible dividends from Canadian public companies 15,000 Canadian bond interest 40,000 The following is a summary of other information for Wrap Ltd. for the 2023 year. Taxable income Required: $236,000 Capital dividend paid 12,000 Eligible dividend paid 10,000 Non-eligible dividend paid 75,000 Small business deduction 38,000 Total Federal Part I tax payable 31,920 Determine the dividend refund for 2023. Would the dividend refund change if Wrap Ltd. was not a CCPC but instead was a private corporation or a public corporation? Page 498
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:PROBLEM FIVE
Wrap Ltd. is a Canadian-controlled private corporation. At the end of 2022, Wrap had the following tax account balances.
Non-capital losses
$ 8,000
Net capital losses
2,000
Non-eligible RDTOH
7,000
Dividend refund from non-eligible dividends
1,000
CDA
12,000
For the current year, 2023, net income for tax purposes is $261,000. Included in this amount is the following.
Income from an active business carried on in Canada $200,000
Taxable capital gain
6,000
Eligible dividends from Canadian public companies
15,000
Canadian bond interest
40,000
The following is a summary of other information for Wrap Ltd. for the 2023 year.
Taxable income
Required:
$236,000
Capital dividend paid
12,000
Eligible dividend paid
10,000
Non-eligible dividend paid
75,000
Small business deduction
38,000
Total Federal Part I tax payable
31,920
Determine the dividend refund for 2023. Would the dividend refund change if Wrap Ltd. was not a CCPC but instead was a
private corporation or a public corporation?
Page 498
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