Problem: Lesson Inc. is located in Alberta. During its current fiscal period, Lesson Inc. purchases an office building for $1,450,000 (excluding GST), including a payment for the land of $320,000. It spends an additional $347,400 (excluding GST) for equipment to be used in the building.
The building will be used 35 percent to produce fully taxable supplies and 65 percent for exempt supplies. The equipment will be used 42 percent for taxable supplies and 58 percent for exempt supplies.
Required: Show all calculations necessary to support your conclusions.
Determine the input tax credits that Lesson Inc. can claim as a result of these capital expenditures.