BUSI-COMM Midterm Sep_2010 Solutions

BUSI-COMM Midterm Sep_2010 Solutions - STUDENTS LAST

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Unformatted text preview: STUDENTS LAST NAME________________________ FIRST NAME:_____________________ STUDENT #:______________________________ SECTIONS: 101 (1:00pm) 102 (2:00pm) 103 ( 3:00pm) BUSI 355 (Mon 6:30PM) Sauder School of Business THE UNIVERSITY OF BRITISH COLUMBIA COMMERCE / BUSINESS 355 Introduction to Income Tax Mid-Term Examination ***ANSWERS BOOKLET*** October 29th, 2010 Instructor: Tran Chung Total Marks: 40 Time: 180 minutes This ANSWER BOOKLET consists of 18 pages including this cover page, schedules 8. Financial calculators can be used during this examination. Allocate your time carefully and clearly explain your analysis. The Income Tax Act is permitted to be used during exam (tabbed with name of provision, underlined, or highlighted, but no other notations or writings). Assume all persons are Canadian resident unless specifically stated otherwise. You CANNOT ask any questions during the exam. If there are any omissions or errors, please state them clearly and make the appropriate assumptions that you feel are necessary to complete the answer. Please answer all questions in this answer booklet. 1 Part One: Multiple Choice (10 questions, 1 mark each TOTAL 10 marks) ***FINAL ANSWER MUST BE IN PEN AND IN CAPS*** Question Answer 1. B 2. A 3. C 4. B 5. C 6. D 7. C 8. C 9. B 10. B 2 PART TWO Question 1 (12marks) Calculate Ivannas minimum net employment income inclusions for 2010 in accordance with the provisions of the Income Tax Act. NET EMPLOYMENT INCOME (If required, please use the following page to show additional work). Subtotal Total Ivanna Kiltran, VP of Operations at Nart Inc. (Nart), a Canadian controlled private corporation, has asked your assistance concerning the tax implications of certain amounts and benefits she received from her employer, Nart, during 2010. Salary.....$100,000 Bonus ($30,000 of the bonus was paid on January 15 th , 2011)........62,000 Payroll deductions: Income taxes........................$60,000 Registered pension plan contributions...............10,000 Canada Pension Plan premiums...2,119 Employment insurance....732 Donations to United Way (charity).......................3,000 Group accident disability insurance premiums...110 (75,961) Net pay.... $86,039 Nart matched the RPP contributions of $10,000 made by Ivanna. Nart required Ivanna to pay for certain employment related expenses described below and completed the T2200. Tax treatment (if any) of the above opening paragraph: Salary Bonus ($30,000 taxable when received) Income tax not deductible RPP contribution deduction under 8(1)(m) RPP, EI, Donations and group accident insurance not deductible 100,000 32,000- (10,000)- $122,000 3 1. Nart paid for Ivannas gym membership which cost $2,400. She regularly uses the gym to network with potential clients of Nart. the gym to network with potential clients of Nart....
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BUSI-COMM Midterm Sep_2010 Solutions - STUDENTS LAST

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