Unformatted text preview: Reserve for delayed payment for 2007 was $20,000, In 2008 the 2nd year of the
instalment sale, 10% of the deferred sale was collected. If the gross profit was
$40,000 on the instalment sale in year 1, what was the reserve balance at the end ofyearZ?
b) $ 4,000 \/
d) 0 ' If another 10% 0f the deferred sales was collected in 2010, and nothing was collected
in 2009, what is the reserve balance at the end of year 4: a) $12,000
b) $ 4,000 c) $16,000
Q 0 Dividends received from a Canadian controlled private corporation from business
income that is not eligible for the small business deduction, is gross-upped by 145%
and the dividend tax credit (federal and provincial) is approximately 20% combined. True Fa e /
1 2 The taxpayer’s principal business is building homes. He purchases land costing
$100,000, and he incurred $15,000 in interest costs and $5,000 in property taxes.
The interest and property taxes are fully deductible. [ T e False
1 2 Fred’s company provided extensive retirement counselling service at a luxurious
spa in the Bahamas for a 1 week period. The cost the package to the company
was $4,000. None of the amount is a taxable benefit to Fred. ' : False X
2 , An amount received by a former employee in lawsuit instituted for damages, after
the employer harassed the employee into quitting is considered be a retirement
allowance and is fully taxable. True / Fals
1 2 ...
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- Spring '11