S2 Midterm answer for Q 3 and 4 October 28 10

S2 Midterm answer for Q 3 and 4 October 28 10 - 5 A 6 D 7 B...

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Question 3 Answer Reference 1 -1000 20(1)(j) 2 -1000 20(1)(e) 3 -1200 20(1)(bb) 4 2500 69(1) okay if 69(1)(b) 5 50 6(8) Question 4 1 C 2 B 3 B 4 A = $1,500 = $1,000 standby charge plus $500 Operating cost benefit standby charge = (2/3x 500 x 8) x (5,000/8 x1,667) operating cost benefit = the lesser of .24 x 5,000 pers km = $1,200 or ½ standby charge = $500
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Unformatted text preview: 5 A 6 D 7 B Dividend Fund 4% of $2000 80 Grossup 25% of 80 20 Dividend subject to tax 1 00 Federal & provincial tax @ (46%) 46 Dividend tax credit (20 ) Net tax paid 26 After tax income: 80 26 54 Income Fund Interest income 6% of $2000 120 Federal & provincial tax @ (46%) 55.2 After tax income: 120 55.2 64.8...
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