Chapter 4 P4-10 - Solution to P4-10 Employment income 20X6:...

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Solution to P4-10 Employment income 20X6: ITA 5(1) Salary - QR Ltd. $56,000 - AP Ltd. 2,000 58,000 ITA 5(1) Holiday pay 1,000 ITA 5(1) Commission advance 1,500 ITA 6(1)(f) Insurance receipts - $4,500 - ($500 + $3,000) 1,000 ITA 6(1)(e) Standby charge - 35,000 x 2% x 7 months $4,900 ITA 6(1)(k) Auto operating benefit - 24¢ x 12,000 km 2,880 7,780 less reimbursement (800 ) 6,980 ITA 7(1) Stock option benefit - 4,000 shares x ($8 - $6) 8,000 76,480 Employment expenses: ITA 8(1)(m) RPP (4,000) ITA 8(1)(b) Legal - salary dispute (800) ITA 8(1)(h.1) Auto lease - $904 x 2 months (Note 3) $1,808 Auto operating costs 900 $2,708 Employment portion - 70% (1,896 ) Net employment income $69,784 Notes : 1. The commission earned in 20X6 but not received until 20X7 is included in employment income in 20X7 [ITA 5(1)]. 2. The employer’s contribution to the RPP ($4,000) and the $500 premium for group sickness and accident insurance paid by the employer are not taxable benefits. They are specifically excluded [ITA 6(1)(a)(i)].
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This note was uploaded on 03/17/2012 for the course COMM 355 taught by Professor Trancheung during the Winter '10 term at The University of British Columbia.

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Chapter 4 P4-10 - Solution to P4-10 Employment income 20X6:...

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