Reference no: EM133076258
Question - Julstan Multi-Enterprise Limited (JML) is a Canadian-controlled private corporation. It has operated with a December 31 year-end. At its December 31, 2015 tax year-end, the balance in its capital dividend account was "0", with no negative amounts carried for future offset.
The following transactions occurred in the indicated taxation years thereafter.
May 24, 2016: sale of shares held in a public corporation for proceeds of $48,000; the shares had cost $72,000 and JML paid a sales commission of $2,000
June 30, 2017: acquisition of an unlimited-life franchise for $49,000
August 20, 2018: received $25,000 as a dividend from the capital dividend account of a wholly owned subsidiary
October 31, 2019: sold the following assets pertaining to the franchise
|
|
Proceeds of Disposition
|
Original Cost
|
UCC
|
Selling Costs
|
|
Investments
|
$36,000
|
$47,000
|
n/a
|
$1,000
|
|
Land
|
40,000
|
26,000
|
n/a
|
2,000
|
|
Building
|
118,000
|
92,000
|
87,000
|
6,000
|
|
Equipment
|
12,000
|
17,000
|
10,500
|
-
|
|
Franchise rights
|
55,000
|
49,000
|
31,500
|
-
|
|
Goodwill
|
30,000
|
-
|
-
|
-
|
June 9, 2020: received $100,000 from a life insurance policy on the life of a key employee; the corporation had paid total premiums of $19,000 on the policy
July 22, 2021: elected to pay a dividend of $75,000 out of the capital dividend account
Required - Compute the balance in JML's capital dividend account at December 31, 2021.