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ACCT 2 2 1 3 Assignment # 1 Calculating Taxable Income Due April 5 , 2 0 2 4 Instructions: In groups of up to

ACCT 2213 Assignment #1
Calculating Taxable Income
Due April 5,2024
Instructions:
In groups of up to 4 people, or individually, calculate the taxable income for the taxpayer below. Please ensure that you place the completed assignment in the drop box in DC Connect Assignments.
FACTS:
For the past 5 years, Mr. Frost has been employed as a financial analyst by a large Canadian public company located in Winnipeg. During 2023, he received $93,000 in wages. 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 2023 and the remainder is to be paid on January 15,2024.
During 2023, Mr. Frost's employer withheld the following amounts from his gross wages:
Federal Income Tax $8,000
EI Premiums 1,002
CPP Contributions 3,754
RPP Contributions 2,800
Donations to a registered charity 480
Union dues 1,240
Other Information:
1. Due to an airplane accident while flying back from Thunder Bay on business, Mr. Frost was seriously injured and confined to a hospital for two full months of 2023. While he was off work, he received workers compensation benefits of $3,200 and he received $13,800 in disability payments through his employers disability insurance plan. All the premiums for the disability insurance plan are paid by the employer. The payments from workers compensation and the disability insurance plan were not included on Mr. Frosts T4.
2. Mr. Frosts employer contributed $2,800 into Mr. Frost's Registered Pension Plan (RPP) and $3,500 into his Deferred Profit-Sharing Plan (DPSP). These are the same amounts that the employer contributed to Mr. Frosts RPP and DPSP in 2022.
3. Mr. Frost 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 the operating costs of the car, and these amounted to $3,500 for 2023. Mr. Frost drove the car a total of 35,000 kilometers in 2023,30,000 kilometers of which were carefully documented as use for employment purposes and 5,000 for personal use. While he was in the hospital (see Item 1), his employer required that the car be returned to company premises. Mr. Frost reimbursed his employer $2,000 to cover his operating expenses.
4. On January 15,2023, Mr. Frost received options to buy 300 shares of his employer's common shares at a price of $23 per share. At this time, the shares were trading at $20 per share. Mr. Frost exercised these options on July 6,2023, when the shares were trading at $28 per share. He does not plan to sell the shares for at least a year.
5. To assist Mr. Frost in acquiring a home in Winnipeg, his employer granted him a five-year, interest free loan of $125,000. The loan was granted on October 1,2023. and, at this point in time, the interest rate on open five-year mortgages was 5%. Assume the prescribed interest on employee loans was 3% on this date and remained unchanged during the year. Mr. Frost purchased a house for $435,000 on October 2,2023. He has not owned a home during any of the preceding four years.
6. Other disbursements made by Mr. Frost include the following:
Advanced financial accounting course tuition fees $1,200
Music history course tuition fees 600
Fees paid to financial planner 300
Payment of premiums on life insurance 642
Mr. Frost's employer reimbursed him for the tuition fees for the accounting course, but not the music course. The reimbursement was not included as a taxable benefit on his T4.
7. Mr. Frost is a widower. His wife was killed in a car accident 2 years ago that injured his 8-year-old son, Harold, so badly that he qualifies for the disability tax credit. Harold has no net income for the year.
8. Mr. Frosts 2022 Notice of Assessment showed unused Registered Retirement Savings Plan (RRSP) room of $7,000. In 2022 his earned income for RRSP purposes was $87,000. He wants to maximize his RRSP contributions in 2023.
9. Mr. Frost's mother, Grace, lives with Mr. Frost and cares for Harold. Grace is 67 years old, and her net income is $7,500. Grace refused to take any payments for caring for Harold as she received a large inheritance in the previous year. As a result, Mr. Frost did not pay any child care or attendant costs for Harold.
10. Mr. Frost paid the following eligible medical costs:
For Himself $ 9,300
For Harold 2,450
For Grace 1,265
Total $13,015
Required: (Show all calculations)
Calculate Mr. Frost's 2023:
a) Employment income,
b) Net income for tax purposes, and
c) Taxable incom Please answer if mr frost is born and raised as an ontario resident

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