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Schedule 101 - T2


#1

Does anyone know if schedule 101 is mandatory on first year filling after incorporation?

I’ve heard the corporation will have a transaction:
Share capital XXX
Bank/SHx XXX

However, in this situation, there have been some assets transferred from the sole proprietorship to the incorporated business (computer & furniture)

I was thinking of entering:

Assets $2,000.00
SH loan $2,000

&

Share Capital $1
SH loan $1

If anything - can anyone comment if this is how they would go about?


#2

My concern would be that there may be a lack of application of contract knowledge, lack of S85 application knowledge, and not to mention that in bookkeeping, one cannot just make up entries out of thin air…

Not sure how to put it more politely, sorry.
Share Capital, Bank, and Loan entries are not to be manufactured on a whim, but must record actual events.

If a client posed me with the above questions, I would say “Thats what you are hiring me for, give me the originals of all documentation to examine and advise…”

I wouldnt attempt to advise this piecemeal. Sorry again for being somewhat blunt.


#3

My practice has always been to record share capital plus whatever offsets that (cash in bank, S/H loan). My assumption is that the incorporating balance sheet is a snapshot at the moment of incorporation, before any assets are rolled in. All you have is share capital and something to offset it. It’s not meant to be complex.


#4

@joe.justjoe1
Hey Joe,
Thank you for the response

Contract knowledge - not sure what you’re referring to - agreements & details on share issues?
S85 - business was sole prop for 8 months prior to incorp & was running at $2,000 loss - not sure if that warrants transfer of GW.
Assets transferred @ UCC (computer) - no CG to defer.
Bookkeeping - assets are owned by SH (from the sole prop) & rolled to Corp.

Thanks


#5

Hello @jhd.hemeon

Thanks!


#6

cash $10 dr
Incorp Fees $1,500 dr
A/C Payable $1,500 cr
Shares $10 cr

Yes, it is mandatory


#7

It is not the purpose of this forum community to provide professional accounting and tax and legal advice. I would suggest you seek professional accounting advice.


#8

Thank you. I also thought this forum was NOT for technical questions…

I am not interested in receiving notifications on this forum from people asking technical questions.

Many of us have studied hard, spent time and monies to acquire knowledge.

Most of us probably do not wish to provide this for FREE as this is the way in which we earn a living

I understand that some persons are just trying to help their clients and possibly think the questions are simple but the thought process behind your one little question involves a lot of background knowledge and consequences

Perhaps the best you can do for your client in these complex situations is to refer to someone else until you have had time to complete courses which deal with these complex issues

Please to the TaxCycle personnel… can we find a way to filter out these tax questions?