TSN Ltd. is a Canadian private company with a December 31 year end. The transact
ID: 2493597 • Letter: T
Question
TSN Ltd. is a Canadian private company with a December 31 year end. The transactions which follow involve TSN Ltd.’s capital dividend account. • During 2004, the Company received a capital dividend of $30,000. • During 2005, the Company sold a capital asset with an adjusted cost base of $160,000 for cash proceeds of $200,000. • During 2007, the Company sold an unlimited life franchise for $155,000. The Company had paid $125,000 for it in 2005. There have been no other additions to the cumulative eligible capital balance. It is the Company’s policy to make maximum CCA and CEC deductions. • During 2008, the Company sold a non-depreciable capital asset with an adjusted cost base of $120,000 for cash proceeds of $100,000. • During 2015, the Company paid an ITA 83(2) capital dividend of $20,000. Determine the balance in the capital dividend account at December 31, 2015.
Explanation / Answer
Particulars Amount
2004 Received Capital Dividend Amount $30000
2005 Gain on adjusted cost base $40000
2007 Gain on sale of francisee $30000
2008 Capital loss on non depreciable asset ($20000)
Balance in Capital Dividend Account $80000
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