Since its incorporation in 2010, Park Inc. has qualifed as a CCPC. During the period since incor-poration until December 31, 2021, the company has had the following transactions that might involve the capital dividend account: 1. In 2012, the company sold depreciable property with an ACB of $225,000. It was the last property in its class and the balance in the class at the time of the sale was $129,600. The proceeds from the sale were $275,000. No additional property was purchased in 2012. 2. In 2014, the company received a capital dividend of $46,000. 3. In 2015, the company received life insurance proceeds, net of the adjusted cost basis of the policy, in the amount of $27,500. 4. In 2016, the company paid a capital dividend of $38,000 and eligible dividends of $19,000. The required election and designation was made. 5. In 2016, the company sold a parcel of land for $100,000. The ACB of this land was $145,000. 6. In January 2021, Park acquired all of the shares of a small business corporation at a cost of $850,000. Park had intended to merge the two corporations together, but before this could take place the company received an unsolicited ofer to purchase the shares for $965,000. Finding this ofer too attractive to resist, it was accepted and the shares were sold on Octo-ber 1, 2021 for $965,000. 7. In 2021, the company received a capital dividend of $17,800. They paid a capital dividend of $21,600 and eligible dividends of $8,000. The required election and designation was made. Required: Determine the balance in the company’s capital dividend account as of December 31,2021
Since its incorporation in 2010, Park Inc. has qualifed as a CCPC. During the period since incor-poration until December 31, 2021, the company has had the following transactions that might involve the capital dividend account: 1. In 2012, the company sold depreciable property with an ACB of $225,000. It was the last property in its class and the balance in the class at the time of the sale was $129,600. The proceeds from the sale were $275,000. No additional property was purchased in 2012. 2. In 2014, the company received a capital dividend of $46,000. 3. In 2015, the company received life insurance proceeds, net of the adjusted cost basis of the policy, in the amount of $27,500. 4. In 2016, the company paid a capital dividend of $38,000 and eligible dividends of $19,000. The required election and designation was made. 5. In 2016, the company sold a parcel of land for $100,000. The ACB of this land was $145,000. 6. In January 2021, Park acquired all of the shares of a small business corporation at a cost of $850,000. Park had intended to merge the two corporations together, but before this could take place the company received an unsolicited ofer to purchase the shares for $965,000. Finding this ofer too attractive to resist, it was accepted and the shares were sold on Octo-ber 1, 2021 for $965,000. 7. In 2021, the company received a capital dividend of $17,800. They paid a capital dividend of $21,600 and eligible dividends of $8,000. The required election and designation was made. Required: Determine the balance in the company’s capital dividend account as of December 31,2021
Chapter16: Accounting Periods And Methods
Section: Chapter Questions
Problem 15DQ
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Since its incorporation in 2010, Park Inc. has qualifed as a CCPC. During the period since incor-poration until December 31, 2021, the company has had the following transactions that might involve the capital dividend account:
1. In 2012, the company sold depreciable property with an ACB of $225,000. It was the last
property in its class and the balance in the class at the time of the sale was $129,600. The
proceeds from the sale were $275,000. No additional property was purchased in 2012.
2. In 2014, the company received a capital dividend of $46,000.
3. In 2015, the company received life insurance proceeds, net of the adjusted cost basis of the
policy, in the amount of $27,500.
4. In 2016, the company paid a capital dividend of $38,000 and eligible dividends of $19,000.
The required election and designation was made.
5. In 2016, the company sold a parcel of land for $100,000. The ACB of this land was $145,000.
6. In January 2021, Park acquired all of the shares of a small business corporation at a cost of
$850,000. Park had intended to merge the two corporations together, but before this could
take place the company received an unsolicited ofer to purchase the shares for $965,000.
Finding this ofer too attractive to resist, it was accepted and the shares were sold on Octo-ber 1, 2021 for $965,000.
7. In 2021, the company received a capital dividend of $17,800. They paid a capital dividend of
$21,600 and eligible dividends of $8,000. The required election and designation was made.
Required: Determine the balance in the company’s capital dividend account as of December 31,2021
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