Question

In: Accounting

Assignment Problem Three - 14 (Employment Income) For the past five years, Mr. Brooks has been...

Assignment Problem Three - 14 (Employment Income)

For the past five years, Mr. Brooks has been employed as a financial analyst by a large Canadian

public firm located in Winnipeg. During 2020, his basic gross salary amounts to $63,000. In addition, he was awarded an $11,000 bonus based on the performance of his division. Of the total bonus, $6,500 was paid in 2020 and the remainder is to be paid on January 15, 2020.

During 2020, Mr. Brooks’ employer withheld the following amounts from his gross wages:

Federal Income Tax

$3,000

Employment Insurance Premiums

856

Canada Pension Plan Contributions

2,898

Registered Pension Plan Contributions

2,800

Donations To The United Way

480

Union Dues

240

Payments For Personal Use Of Company Car

1,000

Other Information:

  1. Due to an airplane accident while flying back from Thunder Bay on business, Mr. Brooks was seriously injured and confined to a hospital for two full months during 2020. As his employer provides complete group disability insurance coverage, he received a total of $4,200 in payments during this period. All of the premiums for this insurance plan are paid by the employer. The plan provides periodic benefits that compensate for lost employment income.
  2. Mr. Brooks is provided with a car that the company leases at a rate of $678 per month, including both GST and PST. The company pays for all of the operating costs of the car, and these amounted to $3,500 during 2020. Mr. Brooks drove the car a total of 35,000 kilome- tres during 2020, 30,000 kilometres of which were carefully documented as employment- related travel. While he was in the hospital (see Item 1), his employer required that the car be returned to company premises.
  3. In order to assist Mr. Brooks in acquiring a new personal residence in Winnipeg, his employer granted him a five year, interest free loan of $125,000. The loan qualifies as a home reloca- tion loan. The loan was granted on October 1, 2020, and, at this point in time, the interest rate on open five year mortgages was 5 percent. Assume the relevant ITR 4301 rate was 2 percent on this date. Mr. Brooks purchases a house for $235,000 on October 2, 2020. He has not owned a home during any of the preceding four years.
  4. Other disbursements made by Mr. Brooks include the following:

Advanced financial accounting course tuition fees

$1,200

Music history course tuition fees

(University of Manitoba one week intensive course)

600

Fees paid to financial planner

300

Payment of premiums on life insurance

642

Mr. Brooks’ employer reimbursed him for the tuition fees for the accounting course, but not the music course.

Required: Calculate Mr. Brooks’ net employment income for the taxation year ending December 31, 2020.

Solutions

Expert Solution

Answer :


Related Solutions

Question 1 For the past five years, Mr. Brooks has been employed as a financial analyst...
Question 1 For the past five years, Mr. Brooks has been employed as a financial analyst by a large Canadian public firm located in Winnipeg. During 2020, his basic gross salary amounts to $63,000. In addition, he was awarded an $11,000 bonus based on the performance of his division. Of the total bonus, $6,500 was paid in 2020 and the remainder is to be paid on January 15, 2021. During 2020, Mr. Brooks’ employer withheld the following amounts from his...
Has overall employment been rising or falling during the past 3 years? What factors might account...
Has overall employment been rising or falling during the past 3 years? What factors might account for this pattern? Have US workers’ wages been rising or falling during the past 3 years?
Mr. Johnson has Net Income For Tax Purposes of $250,000, all of which is employment income....
Mr. Johnson has Net Income For Tax Purposes of $250,000, all of which is employment income. His employer has withheld and remitted the required EI and CPP amounts. Mr. Johnson was married on December 1, 2019. His wife, an accounting student, had salary of $27,500. Her tuition fees for 2019 were $4,500 and textbook costs were $800. She wishes to transfer any amounts to her husband. REQUIRED: Determine the maximum amount of 2019 personal tax credits, including transfers from a...
Over the past five years, a stock produced returns of 14%, 22%, -16%, 4%, and 11%....
Over the past five years, a stock produced returns of 14%, 22%, -16%, 4%, and 11%. If the returns are normally distributed, what is the probability that an investor in this stock will NOT lose more than 7.4% nor earn more than 21.4% in any one given year? (Hint: Find average return and standard deviation first.)
L Co. has not been very profitable for the past three years. Additionally, a recently-ousted manager...
L Co. has not been very profitable for the past three years. Additionally, a recently-ousted manager purchased a substantial quantity of inventory earlier this year…inventory whose customer desirability has waned to some extent. As such, the inventory value has declined below its cost and two methods of handling the write-down are being discussed: showing the amount of the write-down ($3,000,000) as a line item loss on the income statement and showing the loss as part of cost of goods sold....
L Co. has not been very profitable for the past three years. Additionally, a recently-ousted manager...
L Co. has not been very profitable for the past three years. Additionally, a recently-ousted manager purchased a substantial quantity of inventory earlier this year…inventory whose customer desirability has waned to some extent. As such, the inventory value has declined below its cost and two methods of handling the write-down are being discussed: showing the amount of the write-down ($3,000,000) as a line item loss on the income statement and showing the loss as part of cost of goods sold....
L Co. has not been very profitable for the past three years. Additionally, a recently-ousted manager...
L Co. has not been very profitable for the past three years. Additionally, a recently-ousted manager purchased a substantial quantity of inventory earlier this year…inventory whose customer desirability has waned to some extent. As such, the inventory value has declined below its cost and two methods of handling the write-down are being discussed: showing the amount of the write-down ($3,000,000) as a line item loss on the income statement and showing the loss as part of cost of goods sold....
L Co. has not been very profitable for the past three years. Additionally, a recently-ousted manager...
L Co. has not been very profitable for the past three years. Additionally, a recently-ousted manager purchased a substantial quantity of inventory earlier this year…inventory whose customer desirability has waned to some extent. As such, the inventory value has declined below its cost and two methods of handling the write-down are being discussed: showing the amount of the write-down ($3,000,000) as a line item loss on the income statement and showing the loss as part of cost of goods sold....
L Co. has not been very profitable for the past three years. Additionally, a recently-ousted manager...
L Co. has not been very profitable for the past three years. Additionally, a recently-ousted manager purchased a substantial quantity of inventory earlier this year…inventory whose customer desirability has waned to some extent. As such, the inventory value has declined below its cost and two methods of handling the write-down are being discussed: showing the amount of the write-down ($3,000,000) as a line item loss on the income statement and showing the loss as part of cost of goods sold....
A distribution of scores in Sociology 100 for the past five years has a mean of...
A distribution of scores in Sociology 100 for the past five years has a mean of 75 and a standard deviation of 20. What scores represent the middle 75% of the distribution?
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT