With Respect to the Determination of Tax Payable for a Corporation

question 78

Multiple Choice

With respect to the determination of Tax Payable for a corporation, which of the following statements is not correct?

• A)The federal tax abatement percentage is reduced when less than 100 percent of the corporation's income is allocated to a province.
• B)The basic tax rate applicable to corporations is 38 percent.
• C)Provincial corporate taxes are based on a flat rate applied to a taxable income figure.
• D)Full rate taxable income includes any income that is not eligible for the small business
• Deduction.
• Small Business Deduction

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Definitions:

Purchase of Land

An accounting transaction involving the acquisition of land, classified as a non-current asset on the balance sheet.

Significant Noncash

Transactions or activities that have a major impact on a company's financial position but do not involve a direct exchange of cash.

Preferred Shares

A class of stock that provides owners with a fixed dividend ahead of the company's common shares and with priority over common shares in asset liquidation.

Note Payable

A formal, written agreement to pay a certain amount of money, typically including interest, to the lender at a future date or on demand.