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4561 Fall 2010 midterm 1 for posting

4561 Fall 2010 midterm 1 for posting - YORK UNIVERSITY...

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YORK UNIVERSITY MID-TERM EXAM – FALL 2010 AP/ADMS 4561 TAXATION OF PERSONAL INCOME IN CANADA Number of Questions: 4 Number of Pages: 8 (please ensure you have all pages before you start) Time allowed: 2 hours (70 marks) ______________________________________________________________ Instructions (Please read before you start the test) : 1. You may use a non-programmable calculator and the Mid-term Exam Information Sheet included with this exam. You may use your Income Tax Act. Highlighting, underlining, and the use of tabs with section numbers only are allowed. Nothing can be written in your Act or on the tabs (other than section numbers) and no other materials can be inserted in your Act. Use of unauthorized aids is considered to be a breach of the Senate Policy on Academic Honesty. Acts that contain unauthorized writing or materials will be confiscated in the exam and used as evidence. You cannot use a dictionary or any other aids. 2. Time allotments are provided for each question as a guide to ensure that you spend the appropriate amount of time on each question. 3. The exam must be prepared in ink and “whiteout” not used for the exam to be considered for remarking. If the exam is not prepared in ink or if whiteout is used, it will not be remarked. 4. You only need to cite sections of the Act in Question 3. 5. Questions 1 and 2 are to be answered in your solution booklet. ONLY ONE SOLUTION BOOKLET IS ALLOWED. If you feel you require more information in a fact situation, outline the exact nature of the information CLEARLY and specify how it would affect your decision, but do not contradict facts or assume the abnormal. Ignore the effect of leap years in your answers. 6. Questions 3 and 4 are to be answered on this question paper. This question paper must be handed in inside the solution booklet. 7. Please raise your hand if you have any questions during the exam. 8. The prescribed rates applicable to interest free and low interest loans for the 2010 calendar year are as follows for the purposes of this test: 1st qtr. - 4%; 2nd qtr. - 4%; 3rd qtr. - 3 %; 4th qtr. - 3% _______________ _______________ _________ LAST NAME FIRST NAME SECTION # Fall 2010 – ADMS 4561 Midterm #1 Page 1 of 8
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YOU MUST HAND IN THIS QUESTION PAPER Question 1 (32 marks; suggested time 55 minutes) The following information relates to the 2010 taxation year of Brian Smith, who is a commissioned salesperson with Pubco Inc. (“Pubco”), a Canadian resident public corporation. Brian is not married and has no children. 1. In 2010 Brian received the following income from Pubco: Salary $90,000 Commissions based on sales $10,000 2. From these payments, Pubco withheld Canada Pension Plan and Employment Insurance premiums of $2,163 and $747 respectively and Registered Pension Plan contributions of $5,000. Assume no income tax was withheld. 3. During 2010, Pubco paid - $360 in premiums for Brian’s participation in a private medical and dental plan - $250 in life insurance premiums for a policy on Brian’s life - $5,000 in employer contributions to its Registered Pension Plan for Brian.
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