Solved

It Is the End of 20x8, and ABC Inc

question 6

Essay

It is the end of 20x8, and ABC Inc. (a CCPC) is for sale. Jane, the sole shareholder would like to know if the company is currently a qualified small business corporation. Jane has provided you with the following information:
All of the business activities of ABC Inc. have taken place in Canada.
The following amounts represent fair market values of the company's assets:
*ABC owns 35% of the shares of XYZ, which is a small business corporation with 100% of the fair market value of its assets consistently used in active business in Canada.
Additional information:
The shares have not changed hands since the company began operations four years ago.
The land was acquired at the beginning of 20x8 with a five-year mortgage.
All of the other asset values have remained constant over the past three years.
Required:
Determine the following for ABC Inc.:
A) Is ABC Inc. a 'small business corporation' (SBC)? Show your calculations to support your answer.
B) Is ABC Inc. a 'qualified small business corporation' (QSBC)? Show calculations to support your answer.

Definitions:

Leader's Decision

An authoritative or guiding choice made by a leader that directs or influences the course of action for a group or organization.

Subordinates

Individuals who are lower in rank or position and are typically subject to the direction and control of their superiors.

Vroom-Jago Leadership Model

A decision-making model that helps leaders choose how much involvement their teams and subordinates should have in the decision-making process.

Best Leadership Style

A subjective concept suggesting there is an optimal way of leading that maximizes team performance and satisfaction, often dependent on situational factors.