{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Acco340Sample Problems

Acco340Sample Problems - 1 Employment Income SampleProblems...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
                                                                         Sample Problems 1. Employment Income Mr. Samuel Kern is an administrator for a publicly traded Canadian manufacturing company . His gross salary for the year ending December 31, 2009 is $67,600. For the 2009 taxation year, Mr. Kern’s employer withheld the following amounts from his income: Federal Income Tax $11,200 Employment Insurance Premiums 711 Canada Pension Plan Contributions 2,049 Registered Pension Plan Contributions 1,800 Contributions To Group Disability Plan 175 Mr. Kern’s employer made a matching contribution of $1,800 to his registered pension plan and a $175 matching contribution for the group disability insurance. Other Information : 1. During 2009, Mr. Kern is provided with an automobile that has been leased by his employer . The lease payments are $ 815 per month, an amount which includes all taxes and an $89 monthly payment for insurance . The total operating costs of the car were $4,600 for the year and they were paid by the employer. The car is available to him for nine months of the year and he drives it a total of 32,000 kilometers . Of this total, 29,000 kilometers were for travel required in pursuing the business of his employer and the remainder was for personal use. He reimbursed his employer $50 per month of use for his personal use of the automobile. 2. During 2009, Mr. Kern was hospitalized for a period of three weeks. The disability plan provided him with benefits of $1,650 during this period . Mr. Kern began making contributions to this plan in 2008 at the rate of $175 per year. 3. Mr. Kern was required to pay 2009 dues to his professional association in the amount of $1,233. 4. In 2006, Mr. Kern was given options to buy 200 shares of his employer’s stock at a price of $75 per share . At the time the options were issued, the shares were trading at $70 per share . On June 1, 2009 Mr. Kern exercises the options. At the time of exercise, the shares are trading at $83 per share . He does not make the election to defer the income inclusion from the exercise of the stock options and is still holding the shares on December 31, 2009. Required : Calculate Mr. Kern’s minimum net employment income for the year ending December 31, 2009 . Provide reasons for omitting items that you have not included in your calculations. Ignore all GST considerations.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
1. NET EMPLOYMENT - SUGGEST ED SOLUTION FORMAT Mr. Kern’s net employment income for the year would be calculated as follows: Gross Salary $67,600 Plus: Taxable Items: Automobile Benefit (See Note One ) 857 Disability Insurance Benefit (See Note Two) 1,300 Stock Option Benefit [($83 - $75) (200)] 1,600 Less: Deductible Items: Registered Pension Plan Contributions (1,800) Professional Dues (1,233) No impact Items: Employer Contributions to Registered Pension Plan Nil Employer Contributions to Group Disability Plan Nil Employee Contribution to Group Disability Plan Nil Employee Contributions to EI/CPP (will be a credit) Nil Employee withheld federal income tax Nil Net Employment Income $68,324 Note One: Based on the fact that Mr. Kern’s employment related usage is more than 50 percent
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

Page1 / 13

Acco340Sample Problems - 1 Employment Income SampleProblems...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon bookmark
Ask a homework question - tutors are online