Stan Is the Sole Shareholder of Hardware Ltd

Question

Examlex · Accepted Answer

The Answer is

Tools paid dividends of $8,000 to Hardware in 20X9.
Required:
Answer the following questions (filling in the charts where provided):
1)Immediately following the windup,Hardware will report the above assets at what values?

2)Calculate the value of the "bump" available on the ACB for the non-depreciable capital property.
3)Identify the assets which may use the bump,and the amount of the bump available for each asset identified.Identify any unusable bump amount.
1)

2)

3)The bump available to the public shares is $45,000 ($70,000 - $25,000).
The bump available to the land is $175,000 ($300,000 - $125,000).
The bump cannot be allocated to the depreciable assets.
$294,000 - 45,000 - 175,000 = $74,000 of the bump in unusable.

Stan Is the Sole Shareholder of Hardware Ltd

Definitions: