Adobe Acrobat Mrs. Wu comes to you for advice in February 2021. Last year 2020, was a year of considerable change and turmoil for her. Her job in Montreal, Quebec, with X Ltd. was finished because of a reorganization of the Company. She had been with this company since 1989. She found another job with Y ltd. in Brampton, Ontario, but it required her to move there. She commenced working at this job on January 1st.,2021. Her divorce from her former husband became final in 2019. Mrs. Wu who was already a single parent of a nine year old daughter decided to adopt a five year old child locally on May 19.2021. By June 2021, after completing her move to her new job, the adoption was finalized. All legal costs related to the adoption totaled $15,400. Under the terms of the employment agreement with Y Ltd. it was agreed that because she had to sell her house in Montreal to move to Toronto, the employer will re-imburse her on the loss of the sale of the property. She sold the Montreal home for $50,000 less than the cost of the house which was purchased in 1989. Information on receipts and benefits for 2021 were as follows: Salary earned in 2021.. $188,000 Bonus....... 30,000 Profits on sale of cosmetics at home parties.. 9,700 Interest on Canadian savings bonds... 3,450 Dividends from CCPC's 4,000 Dividends from U.S. Corporations (15% withholding tax)... 6,800 18,000 Spousal support receipts pursuant to divorce agreement ($1,000 per month for her support) Moving allowance 9,000 Donations to United Way............ 2,000 Font Signatures F Paragraph Styles Adobe Acrobat Voice Disbursements and withholdings: CPP and El contributions (3,999) Income taxes withheld. (24,000) RPP contributions. (5,500) Union dues. 2,000 I Registered retirement savings plan contributions, made on. 49,000 February 14, 2021/2020 earned income was $153,000 With a P.A. of $5,000). She had unused deduction room of $10,000. 6,000 Tuition fees for nine months full time at a local university. Payment on cancellation of a lease for Waterloo apartment Payment on signing lease for a Montreal apartment. 1,575 2,000 Gas and direct expenses incurred to move to Toronto 300 Trailer rental to move her belongings 350 English (United States) Text Predictions: On Accessibility. Investigate D FOCUS 80 te Dictate Adobe PDF Editor Paragraph Trailer rental to move her belongings Signatures Styles Adobe Acrobat 350 Voice Editor Cost of shipping remaining of household effects 5,200 Cost of staying at a hotel ($125) and meals ($55) for one day While waiting for her household furniture to be unpacked. 180 Payment to babysitter for care of both children after school And during school holiday 10,400 Summer camp for children after school (4 weeks @ $300 per week. 1,200 (each) Hockey school for 2 children. 900 (each) Interest on money borrowed to buy dividend paying stocks. Other Information:- 600 1. At the beginning of 2021, Mrs. Wu had 2 rental properties. These properties are expected to have the following operating cash flows associated with them Property #1 Property #2 Gross rents received $20,000 $16,000 Expenses related to earning rental income:- Advertising (for tenants). 200 0 Property taxes. 1,400... 3,000 Utilities (landlord provided). 4,200. 2,800 Property #1 was purchased in 2000 at a cost of $90,000 for both the land and the building. The cost of the land was $25,000 of the total purchase price. The UCC balance in Class #1 for this property was $25,948 at the beginning of 2021. 5 English (United States) Text Predictions: On Accessibility: Investigate Focus BB o W ENG US scri See como Font Adobe PDF Signatures Paragraph is Styles Adobe Acrobat Voice Editor Property #2 was purchased in 2010 at a total cost of $105,000; the fair market value of the land at the time was $60,000. The U.C.C. balance at January 14.2021 for this property was $33,139. In 2021, the local community enacted strict new bylaws on the safety requirements for rental properties. In order to upgrade the two buildings to the new code the requirements would be $40,000 for property #1 and $60,000 for property #2. As a result Mrs. Wu decided to improve property #1 and paid $40,000 for the improvement. However, she decided to sell property #2 and did so for $248,000. The fair market value of the land was appraised to be $120,000 and the building was $128,000. it. Mrs. Wu's father was a manufacturer of steel rods. In 2018 he was unable due to illness, to continue to operate the business and he passed title to the business to Mrs. Wu. She employed her best friend Jonathan to manage the business and all the other staff remained in place. This allowed her to continue her own employment in the field in which she was happy. The management staff was paid by salaries. Below is the income statement for this business for the year ending December 2021- I X Ltd. Condensed Income Statement For the year ended December 31st 2021 Sales.. -3,824,000 Cast of sales. ../2,878,000) 946,000 Gross Profit General and administrative expenses (379,000) Other...... (186,000) Income before income taxes..... 381,000 Focus 90 DR English (United States) Text Predictions: On Accessibility: Investigate ENG US a Font Adobe Acrobat g Paragraph IS Styles connuerer uw employment in the elu in WHIC She was happy. The management Starr was paiu wy salaries. Voice Editor Reuse File Below is the income statement for this business for the year ending December 2021 X Ltd Condensed Income Statement For the year ended December 319.2021 Sales.. 3,824,000 Cost of sales. (2,878,000) Gross Profit..... 946,000 General and administrative expenses. (379,000) Other.... (186,000) Income before income taxes. 381,000 176,000) Income tax expense. 305,000 Net income. Additional information:- i. An analysis of the cost of sales account revealed that the inventory is valued at average cost within each of the different styles carried. Since the owner is still learning what has appeal, a "mark down rack" has become a common fixture at the back of the store. The tagged prices of the mark- downs are less that their costs, at December 31, 2021 by $1,400. This difference has not been recorded in the financial statement. D. Focus Accessibility: Investigate Text Predictions: On ENG US ch English (United States) 2022 W O ii. Cost of goods sold includes a charge of $2,800 to set up an allowance for returns that are subsequently saleable at full retail price. No such allowance was recorded last year-end because the company only discovered that the allowance was necessary this year. General and administrative expenses include the following: Contributions to a registered pension plan made monthly for the two key employees, expensed By the Corporation's accountant were as follows:- Registered Pension Plan........... Employment Compensation President and CEO.. ..$42,000. $380,000 Store Manager $25,600 260,000 The pension n plan is a defined contribution (money purchase)plan. The contributions above were matched by equal contributions made by the employee. iv. The Company paid the following amounts to Sun Insurance Limited during the year;- Group term life insurance for the four full-time employees.........$4,400 $200,000 term life insurance policy on the president Which was included in the "Insurance" expense account.............. 1,800 $6,200 D) Focus Le English (United States) Text Predictions: On Accessibility: Investigate ENG US H o Editing Font Create and Share Request Adobe PDF Signatures Dictate Editor Paragraph Styles Adobe Acrobat Voice Editor X Company is the beneficiary of the insurance policy on the president. The term life insurance policy on the president was assigned to the bank as collateral for a $500,000 loan from January 18 through to August 3th.2021. The loan was repaid on September 192021 in favour of the operating line of credit. v. The following selected information was taken from the "Promotions" account: Charitable donations to the United Way. .. $6,000 Political contributions to the local politicians... 5,000 Hockey tickets given to suppliers as Xmas gifts. 2,800 Meals & Entertainment by the owner 3,000 Golf green fees incurred while entertaining suppliers, 2,800 Two summer parties and one Xmas party. 18,000 vi. The Company's "Professional expense" account included the following legal and account fees Accounting fees for year-end work, and monthly book-keeping.... $20,000 Legal fees incurred to purchase equipment, 4,000 5 Negotiations for a line of credit at the bank. 8,000 English (United States) Text Predictions: On Accessibility: Investigate Focus One Dark OLE AUTODOC 8, UUU Voice vii. In 2019, the company incurred legal fees of $2,500 to set up the corporation and $1,000 to issue shares to the president and CEO. viii. Other expenses deducted in the financial accounting computation of income include:- Depreciation and amortization. $350,000 Interest on the loan and operating line of credit.. 9,500 Interest on insufficient income tax instalment... 600 Purchase of additional store fixtures bought at a going-out-of- Business sale............ 800 Damages under a breach of contract suit initiated by a Supplier........ 1,900 ix. An examination of the fixed asset ledger indicated the following UCC at the beginning of 2021- Building -1(4%). $568,000 39,000 Equipment(Office)-8(20%)........ Trucks-10(30%)..... Leasehold improvements(Note 1)-Life of lease 170,000 165,000 Licences.................. .5 years........... .87,393 Radio communication equipment(CI#8-20%). 70928 Additional information:- i. The Class 13 assets consists of: IC Focus BA re English (United States) Text Predictions an Accessibility: Investigate ENG Adobe Acrobat VOICE Purchased equipment:- Office equipment(Cl#8-20%). Manufacturing equipment(C129-50%). ...$47,000 255,000 Disposals: Cost. Proceeds Equipment Office. $16,250.. $1,950 Brick building in Class #1 1,400,000. .700,000 Required:- Following the ordering rules of the ITA, compute the federal taxes owing or owe for 2021: I. Complete the following forms:- T11 T12 T1-3 T1-4 Adobe Acrobat Voice Editor APPENDIX #1 2021 Federal Income Tax Brackets Taxable income Tax $49,020 or less. 15% in excess of $49,020. S7,353 +20.5% on next $49,020 in excess of $98,040.. $17,402 ** + 26% on next $53,938 in excess of $151,978 $31,426 ***+29% on next $64,533 in excess of $216,511 $50,141+33% on the remainder *Computed as 15%*$49,020-$7,353 ***Computed as $7,353 + 20.5% of $49,020=$17,402 (rounded) ***Computed as $17,402 + 26% of $53,938 $31,426 (rounded) ****Computed as $31,426 +29% of $64,533=$50,141 (rounded) 2 Non-Refundable 2020 Tax credits Dollar Base Rate Threshold 15 Basic Personal 13,808 * $151,978 (If income is above threshold the credit is reduced to $12,421) Spouse or Equivalent 13,808 ........... 15 Accessibility: Investigate S151,978 D Focus E Ee French (Canada) Text Predictions: On ENG US 40 do ta A 20 3 W Styles Adobe Acrobat ***Computed as $17,402 + 26% of $53,938 =$31,426 (rounded) ****Computed as $31,426 +29% of $64,533=$50,141 (rounded) Voice Editor uses Rauser 2 Non-Refundable 2020 Tax credits Dollar Base Rate Threshold Basic Personal .13,808 15 $151,978 (If income is above threshold the credit is reduced to $12,421) Spouse or Equivalent. Spouse or Equivalent. .13,808 .......... 15 12,141.............15 $151,978 $216,151 Canada Caregiver .7,348 15 $17,256 7.713 .15...........(adjusted by the Age credit of Division B income over $38,893) Pension income.. .2,000........15 (In this case a choice is made between the $2000 and the lesser of the pension income) Canada employment amount. ...1,257 ........15 .16,729 15 Adoption expense amount 15 Up to....... 10,000 Home accessibility tax credit 9 focus BB French (Canada) Text Predictions: On Accessibility: Investigate ENG US 431 PM 9 to 2022-03-17 w . - H a O CON VOICE Editor Red First time home buyers tax credit. 5,000..............15 (Can split with spouse) Volunteer firefighters tax credit. 3,000............. 15 Search and Rescue volunteers tax credit.. 3,000 15 Home Accessibility Tax credit .10,000. 15 CPP(maximum) Amount paid...15 El(maximum) Amount paid..15 Pension...... 2,000 .... 15 Mental or physical impairment amount. .8,662...............15 (Can transfer to a dependant) Tuition amount.. Amount paid(can be transferred to a dependent or spouse or claimed by student in a subsequent tax year) Medical expenses............. Actual Medical Expenses :- LESS: Lesser of: (0) (ii) $2,421 3% of Division B Income Focus 42 ench (Canada) Text Predictions: On ENG us 2022 Accessibility: Investigate OL w E T Charitable donations.... 200. 15 then 29% on amounts over $200 Interest paid on student loans. 15% of actual Dividend Tax Credit... ..6/11 of grossed up dividends for public corporations with gross up of 38% and 9/13 for CCPC with gross up of 15% (An election can be made to transfer this credit to a spouse) Digital News subscription credit is 15% for up to $500 subscriptions Foreign Tax Credit. Lesser of: i. non-business income tax paid to a foreign country ii. Net non business foreign income divided by total Division B income times This number times tax for the year for Part 1 taxes Contribution Credit $400 or less.......... .75% of contribution More than $400 but not more than $750. $300+50% of contribution over $400 $475+one-third of contribution over $750 More than $750, but not more than $1275.. $650 More than $1275.. 1 Focus English (United States) Text Predictions: On Accessibility: Investigate ENG Us Any individual can transfer to the spouse any unused credits of:- i. Tuition ii. Age iii. Pension iv. Mental or physical impairment Taxo Old Age Security Benefits.:- Every resident in Canada is entitled to receive Old Age Security Benefits from the Federal Govt., once that resident is 65 years old. This amount received is clawed back(repayment to the Federal Govt.) at the end of the year depending on the Division income of that person. The Clawback is calculated as: Lesser of: Sxxx i. Old Age Security Benefits received Division B Income less $79,845. If there is an excess 15% of this amount reduces the ii. benefit. FA ! Focus lish (United States) Text Predictions on Accessibility: Investigate Any individual can transfer to the spouse any unused credits of:- i. Tuition ii. Age iii. Pension iv. Mental or physical impairment Taxo Old Age Security Benefits.:- Every resident in Canada is entitled to receive Old Age Security Benefits from the Federal Govt., once that resident is 65 years old. This amount received is clawed back(repayment to the Federal Govt.) at the end of the year depending on the Division income of that person. The Clawback is calculated as: Lesser of: Sxxx i. Old Age Security Benefits received Division B Income less $79,845. If there is an excess 15% of this amount reduces the ii. benefit. FA ! Focus lish (United States) Text Predictions on Accessibility: Investigate 1+ Canada Revenue Agency Agence du revenu du Canada Protected B when completed Income Tax and Benefit Return T1 2021 If this return is for a deceased person, enter their information on this page. Attach to your paper return only the documents that are requested to support your deduction, claim, or expense. Keep all other documents in case the Canada Revenue Agency (CRA) asks to see them later. See the guide for more information about supporting documents. Step 1 - Identification and other information ON 8 Identification Marital status on Social insurance December 31, 2021: First name Last name number (SIN) 10 Married Mailing address 2 Living common-law Date of birth (Year Month Day) PO Box RR 30 Widowed 4 0 Divorced City Prov./Terr. Postal code If this return is for a deceased person, enter the date of death (Year Month Day) 5 Separated Email Address 6 Single By providing an email address, you are registering to receive email notifications from the CRA and agree to the Terms of use in Step 1 of the guide. Your language of correspondence: Votre langue de correspondance : English Franais Residence information Your province or territory of residence on December 31, 2021: If you became a resident of Canada in 2021 for income tax purposes, enter your date of entry: (Month Day) Your current province or territory of residence if it is different than your mailing address above: If you ceased to be a resident of Canada in 2021 for income tax purposes, enter your date of departure: Province or territory where your business had a permanent establishment if you were self-employed in 2021: (Month Day) Your spouse's or common-law partner's information Their first name Their SIN Tick this box if they were self-employed in 2021. Net income from line 23600 of their return to claim certain credits (even if the amount is "0") Amount of universal child care benefit (UCCB) from line 11700 of their return Amount of UCCB repayment from line 21300 of their return Do not use this area. Do not use this area. 17200 17100 5006-R E (21) (Ce formulaire est disponible en franais.) Page 1 of 8 Protected B when completed Step 1 - Identification and other information (continued) 2 Elections Canada Elections Canada For more information, see "Elections Canada" in Step 1 of the guide. A) Do you have Canadian citizenship? If yes, go to question B. If no, skip question B. Yes 2 No B) As a Canadian citizen, do you authorize the Canada Revenue Agency to give your name, address, date of birth, and citizenship to Elections Canada to update the National Register of Electors or, if you are 14 to 17 years of age, the Register of Future Electors? 1 Yes 2 No Your authorization is valid until you file your next tax return. Your information will only be used for purposes permitted under the Canada Elections Act, which include sharing lists electors produced from the National Register of Electors with provincial and territorial electoral agencies, members of Parliament, registered and eligible political parties, and candidates at election time. Your information in the Register of Future Electors will be included in the National Register of Electors once you turn 18 and your eligibility to vote is confirmed. Information from the Register of Future Electors can be shared only with provincial and territorial electoral agencies that are allowed to collect future elector information. In addition, Elections Canada can use information in the Register of Future Electors to provide youth with educational information about the electoral process. Indian Act - Exempt income Tick this box if you have income that is exempt under the Indian Act. For more information about this type of income, go to canada.ca/taxes-indigenous peoples. If you ticked the box above, complete Form T90, Income Exempt from Tax under the Indian Act, so that the CRA can By providing an email address, you are registering to receive email notifications from the CRA and agree to the Terms of use in Step 1 of the guide. Your language of correspondence: Votre langue de correspondance : English Franais Residence information Your province or territory of residence on December 31, 2021: If you became a resident of Canada in 2021 for income tax purposes, enter your date of entry: (Month Day) Your current province or territory of residence if it is different than your mailing address above: If you ceased to be a resident of Canada in 2021 for income tax purposes, enter your date of departure: Province or territory where your business had a permanent establishment if you were self-employed in 2021: (Month Day) Your spouse's or common-law partner's information Their first name Their SIN Tick this box if they were self-employed in 2021. Net income from line 23600 of their return to claim certain credits (even if the amount is "0") Amount of universal child care benefit (UCCB) from line 11700 of their return Amount of UCCB repayment from line 21300 of their return Do not use this area. Do not use this area. 17200 17100 5006- RE (21) (Ce formulaire est disponible en franais.) Page 1 of 8 Protected B when completed Step 1 - Identification and other information (continued) Elections Canada Elections Canada For more information, see "Elections Canada" in Step 1 of the guide. A) Do you have Canadian citizenship? If yes, go to question B. If no, skip question B. Yes 2 No B) As a Canadian citizen, do you authorize the Canada Revenue Agency to give your name, address, date of birth, and citizenship to Elections Canada to update the National Register of Electors or, if you are 14 to 17 years of age, the Register of Future Electors? Yes 2 No Your authorization is valid until you file your next tax return. Your information will only be used for purposes permitted under the Canada Elections Act, which include sharing lists electors produced from the National Register of Electors with provincial and territorial electoral agencies, members of Parliament, registered and eligible political parties, and candidates at election time. Your information in the Register of Future Electors will be included in the National Register of Electors once you turn 18 and your eligibility to vote is confirmed. Information from the Register of Future Electors can be shared only with provincial and territorial electoral agencies that are allowed to collect future elector information. In addition, Elections Canada can use information in the Register of Future Electors to provide youth with educational information about the electoral process. Indian Act - Exempt income Tick this box if you have income that is exempt under the Indian Act. For more information about this type of income, go to canada.ca/taxes-indigenous peoples. If you ticked the box above, complete Form T90, Income Exempt from Tax under the Indian Act, so that the CRA can calculate your Canada workers benefit for the 2021 tax year, if applicable, and your family's provincial or territorial benefits. The information you provide on Form T90 will also be calculate your Canada training credit limit for the 2022 tax year. Foreign property Did you own or hold specified foreign property where the total cost amount of all such property, at any time in 2021, was more than CAN$100,000? 26600 1 Yes 2 No If yes, complete Form T1135, Foreign Income Verification Statement. There are substantial penalties for not filing Form T1135 by the due date. For more information, see Form T1135. 5006-R E (21) Page 2 of 8 The information you provide on Form T90 will also be used to calculate your Canada training credit limit for the 2022 tax year. Foreign property Did you own or hold specified foreign property where the total cost amount of all such property, at any time in 2021, was more than CAN$100,000? 26600 1 Yes 2 No If yes, complete Form T1135, Foreign Income Verification Statement. There are substantial penalties for not filing Form T1135 by the due date. For more information, see Form T1135. 5006-R E (21) Page 2 of 8 Protected B when completed Complete only the lines that apply to you, unless stated otherwise. You can find more information about the lines on this return by calling 1-800-959-8281 or by going to canada.ca/line-xXxxx and replacing "xxxxx" with any 5-digit line number from this return. For example, go to canada.ca/line-10100 for information about line 10100. 10400 + 2 3 11400 + 4 5 11600+ 6 7 8 9 10 Step 2 - Total income As a resident of Canada, you need to report your income from all sources inside and outside Canada. Employment income (box 14 of all T4 slips) 10100 Tax-exempt income for emergency services volunteers (see line 10100 of the guide) 10105 Commissions included on line 10100 (box 42 of all T4 slips) 10120 Wage-loss replacement contributions (see line 10100 of the guide) 10130 Other employment income (see line 10400 of the guide) Old age security (OAS) pension (box 18 of the T4A(OAS) slip) 11300 + CPP or QPP benefits (box 20 of the T4A(P) slip) Disability benefits included on line 11400 (box 16 of the T4A(P) slip) 11410 Other pensions and superannuation (see line 11500 of the guide and line 31400 of the return) 11500 + Elected split-pension amount (complete Form T1032) Universal child care benefit (UCCB) (see the RC62 slip) 11700 + UCCB amount designated to a dependant 11701 Employment insurance and other benefits (box 14 of the T4E slip) 11900 + Employment insurance maternity and parental benefits, and provincial parental insurance plan benefits 11905 Taxable amount of dividends from taxable Canadian corporations (use Federal Worksheet): Amount of dividends (eligible and other than eligible) 12000 + Amount of dividends (other than eligible) 12010 Interest and other investment income (use Federal Worksheet) 12100 + Net partnership income (limited or non-active partners only) Registered disability savings plan income (box 131 of the T4A slip) 12500 + Rental income (see Guide T4036) Gross 12599 Net 12600 + Taxable capital gains (complete Schedule 3) 12700 + Support payments received (see Guide P102) Total 12799 Taxable amount 12800 + Registered retirement savings plan (RRSP) income (from all T4RSP slips) 12900 + Other income (specify) 13000 + Taxable scholarships, fellowships, bursaries, and artists' project grants 13010+ Add lines 1 to 18. Self-employment income (see Guide T4002): Business income Gross 13499 Net 13500 20 Professional income Gross 13699 Net 13700 + 21 Commission income Gross 13899 Net 13900 + 22 Farming income Gross 14099 Net 14100 + 23 Fishing income Gross 14299 Net 14300 + 24 Add lines 20 to 24. Net self-employment income Line 19 plus line 25 Workers' compensation benefits (box 10 of the T5007 slip) 14400 27 Social assistance payments 14500 + 28 Net federal supplements paid (box 21 of the T4A(OAS) slip) 14600 + 29 Add lines 27 to 29 (see line 25000 in Step 4). 14700 = Line 26 plus line 30 Total income 15000 12200 + 11 12 13 14 15 16 17 18 19 + 25 = 26 + 30 31 5006-R E (21) Page 3 of 8 Adobe Acrobat Mrs. Wu comes to you for advice in February 2021. Last year 2020, was a year of considerable change and turmoil for her. Her job in Montreal, Quebec, with X Ltd. was finished because of a reorganization of the Company. She had been with this company since 1989. She found another job with Y ltd. in Brampton, Ontario, but it required her to move there. She commenced working at this job on January 1st.,2021. Her divorce from her former husband became final in 2019. Mrs. Wu who was already a single parent of a nine year old daughter decided to adopt a five year old child locally on May 19.2021. By June 2021, after completing her move to her new job, the adoption was finalized. All legal costs related to the adoption totaled $15,400. Under the terms of the employment agreement with Y Ltd. it was agreed that because she had to sell her house in Montreal to move to Toronto, the employer will re-imburse her on the loss of the sale of the property. She sold the Montreal home for $50,000 less than the cost of the house which was purchased in 1989. Information on receipts and benefits for 2021 were as follows: Salary earned in 2021.. $188,000 Bonus....... 30,000 Profits on sale of cosmetics at home parties.. 9,700 Interest on Canadian savings bonds... 3,450 Dividends from CCPC's 4,000 Dividends from U.S. Corporations (15% withholding tax)... 6,800 18,000 Spousal support receipts pursuant to divorce agreement ($1,000 per month for her support) Moving allowance 9,000 Donations to United Way............ 2,000 Font Signatures F Paragraph Styles Adobe Acrobat Voice Disbursements and withholdings: CPP and El contributions (3,999) Income taxes withheld. (24,000) RPP contributions. (5,500) Union dues. 2,000 I Registered retirement savings plan contributions, made on. 49,000 February 14, 2021/2020 earned income was $153,000 With a P.A. of $5,000). She had unused deduction room of $10,000. 6,000 Tuition fees for nine months full time at a local university. Payment on cancellation of a lease for Waterloo apartment Payment on signing lease for a Montreal apartment. 1,575 2,000 Gas and direct expenses incurred to move to Toronto 300 Trailer rental to move her belongings 350 English (United States) Text Predictions: On Accessibility. Investigate D FOCUS 80 te Dictate Adobe PDF Editor Paragraph Trailer rental to move her belongings Signatures Styles Adobe Acrobat 350 Voice Editor Cost of shipping remaining of household effects 5,200 Cost of staying at a hotel ($125) and meals ($55) for one day While waiting for her household furniture to be unpacked. 180 Payment to babysitter for care of both children after school And during school holiday 10,400 Summer camp for children after school (4 weeks @ $300 per week. 1,200 (each) Hockey school for 2 children. 900 (each) Interest on money borrowed to buy dividend paying stocks. Other Information:- 600 1. At the beginning of 2021, Mrs. Wu had 2 rental properties. These properties are expected to have the following operating cash flows associated with them Property #1 Property #2 Gross rents received $20,000 $16,000 Expenses related to earning rental income:- Advertising (for tenants). 200 0 Property taxes. 1,400... 3,000 Utilities (landlord provided). 4,200. 2,800 Property #1 was purchased in 2000 at a cost of $90,000 for both the land and the building. The cost of the land was $25,000 of the total purchase price. The UCC balance in Class #1 for this property was $25,948 at the beginning of 2021. 5 English (United States) Text Predictions: On Accessibility: Investigate Focus BB o W ENG US scri See como Font Adobe PDF Signatures Paragraph is Styles Adobe Acrobat Voice Editor Property #2 was purchased in 2010 at a total cost of $105,000; the fair market value of the land at the time was $60,000. The U.C.C. balance at January 14.2021 for this property was $33,139. In 2021, the local community enacted strict new bylaws on the safety requirements for rental properties. In order to upgrade the two buildings to the new code the requirements would be $40,000 for property #1 and $60,000 for property #2. As a result Mrs. Wu decided to improve property #1 and paid $40,000 for the improvement. However, she decided to sell property #2 and did so for $248,000. The fair market value of the land was appraised to be $120,000 and the building was $128,000. it. Mrs. Wu's father was a manufacturer of steel rods. In 2018 he was unable due to illness, to continue to operate the business and he passed title to the business to Mrs. Wu. She employed her best friend Jonathan to manage the business and all the other staff remained in place. This allowed her to continue her own employment in the field in which she was happy. The management staff was paid by salaries. Below is the income statement for this business for the year ending December 2021- I X Ltd. Condensed Income Statement For the year ended December 31st 2021 Sales.. -3,824,000 Cast of sales. ../2,878,000) 946,000 Gross Profit General and administrative expenses (379,000) Other...... (186,000) Income before income taxes..... 381,000 Focus 90 DR English (United States) Text Predictions: On Accessibility: Investigate ENG US a Font Adobe Acrobat g Paragraph IS Styles connuerer uw employment in the elu in WHIC She was happy. The management Starr was paiu wy salaries. Voice Editor Reuse File Below is the income statement for this business for the year ending December 2021 X Ltd Condensed Income Statement For the year ended December 319.2021 Sales.. 3,824,000 Cost of sales. (2,878,000) Gross Profit..... 946,000 General and administrative expenses. (379,000) Other.... (186,000) Income before income taxes. 381,000 176,000) Income tax expense. 305,000 Net income. Additional information:- i. An analysis of the cost of sales account revealed that the inventory is valued at average cost within each of the different styles carried. Since the owner is still learning what has appeal, a "mark down rack" has become a common fixture at the back of the store. The tagged prices of the mark- downs are less that their costs, at December 31, 2021 by $1,400. This difference has not been recorded in the financial statement. D. Focus Accessibility: Investigate Text Predictions: On ENG US ch English (United States) 2022 W O ii. Cost of goods sold includes a charge of $2,800 to set up an allowance for returns that are subsequently saleable at full retail price. No such allowance was recorded last year-end because the company only discovered that the allowance was necessary this year. General and administrative expenses include the following: Contributions to a registered pension plan made monthly for the two key employees, expensed By the Corporation's accountant were as follows:- Registered Pension Plan........... Employment Compensation President and CEO.. ..$42,000. $380,000 Store Manager $25,600 260,000 The pension n plan is a defined contribution (money purchase)plan. The contributions above were matched by equal contributions made by the employee. iv. The Company paid the following amounts to Sun Insurance Limited during the year;- Group term life insurance for the four full-time employees.........$4,400 $200,000 term life insurance policy on the president Which was included in the "Insurance" expense account.............. 1,800 $6,200 D) Focus Le English (United States) Text Predictions: On Accessibility: Investigate ENG US H o Editing Font Create and Share Request Adobe PDF Signatures Dictate Editor Paragraph Styles Adobe Acrobat Voice Editor X Company is the beneficiary of the insurance policy on the president. The term life insurance policy on the president was assigned to the bank as collateral for a $500,000 loan from January 18 through to August 3th.2021. The loan was repaid on September 192021 in favour of the operating line of credit. v. The following selected information was taken from the "Promotions" account: Charitable donations to the United Way. .. $6,000 Political contributions to the local politicians... 5,000 Hockey tickets given to suppliers as Xmas gifts. 2,800 Meals & Entertainment by the owner 3,000 Golf green fees incurred while entertaining suppliers, 2,800 Two summer parties and one Xmas party. 18,000 vi. The Company's "Professional expense" account included the following legal and account fees Accounting fees for year-end work, and monthly book-keeping.... $20,000 Legal fees incurred to purchase equipment, 4,000 5 Negotiations for a line of credit at the bank. 8,000 English (United States) Text Predictions: On Accessibility: Investigate Focus One Dark OLE AUTODOC 8, UUU Voice vii. In 2019, the company incurred legal fees of $2,500 to set up the corporation and $1,000 to issue shares to the president and CEO. viii. Other expenses deducted in the financial accounting computation of income include:- Depreciation and amortization. $350,000 Interest on the loan and operating line of credit.. 9,500 Interest on insufficient income tax instalment... 600 Purchase of additional store fixtures bought at a going-out-of- Business sale............ 800 Damages under a breach of contract suit initiated by a Supplier........ 1,900 ix. An examination of the fixed asset ledger indicated the following UCC at the beginning of 2021- Building -1(4%). $568,000 39,000 Equipment(Office)-8(20%)........ Trucks-10(30%)..... Leasehold improvements(Note 1)-Life of lease 170,000 165,000 Licences.................. .5 years........... .87,393 Radio communication equipment(CI#8-20%). 70928 Additional information:- i. The Class 13 assets consists of: IC Focus BA re English (United States) Text Predictions an Accessibility: Investigate ENG Adobe Acrobat VOICE Purchased equipment:- Office equipment(Cl#8-20%). Manufacturing equipment(C129-50%). ...$47,000 255,000 Disposals: Cost. Proceeds Equipment Office. $16,250.. $1,950 Brick building in Class #1 1,400,000. .700,000 Required:- Following the ordering rules of the ITA, compute the federal taxes owing or owe for 2021: I. Complete the following forms:- T11 T12 T1-3 T1-4 Adobe Acrobat Voice Editor APPENDIX #1 2021 Federal Income Tax Brackets Taxable income Tax $49,020 or less. 15% in excess of $49,020. S7,353 +20.5% on next $49,020 in excess of $98,040.. $17,402 ** + 26% on next $53,938 in excess of $151,978 $31,426 ***+29% on next $64,533 in excess of $216,511 $50,141+33% on the remainder *Computed as 15%*$49,020-$7,353 ***Computed as $7,353 + 20.5% of $49,020=$17,402 (rounded) ***Computed as $17,402 + 26% of $53,938 $31,426 (rounded) ****Computed as $31,426 +29% of $64,533=$50,141 (rounded) 2 Non-Refundable 2020 Tax credits Dollar Base Rate Threshold 15 Basic Personal 13,808 * $151,978 (If income is above threshold the credit is reduced to $12,421) Spouse or Equivalent 13,808 ........... 15 Accessibility: Investigate S151,978 D Focus E Ee French (Canada) Text Predictions: On ENG US 40 do ta A 20 3 W Styles Adobe Acrobat ***Computed as $17,402 + 26% of $53,938 =$31,426 (rounded) ****Computed as $31,426 +29% of $64,533=$50,141 (rounded) Voice Editor uses Rauser 2 Non-Refundable 2020 Tax credits Dollar Base Rate Threshold Basic Personal .13,808 15 $151,978 (If income is above threshold the credit is reduced to $12,421) Spouse or Equivalent. Spouse or Equivalent. .13,808 .......... 15 12,141.............15 $151,978 $216,151 Canada Caregiver .7,348 15 $17,256 7.713 .15...........(adjusted by the Age credit of Division B income over $38,893) Pension income.. .2,000........15 (In this case a choice is made between the $2000 and the lesser of the pension income) Canada employment amount. ...1,257 ........15 .16,729 15 Adoption expense amount 15 Up to....... 10,000 Home accessibility tax credit 9 focus BB French (Canada) Text Predictions: On Accessibility: Investigate ENG US 431 PM 9 to 2022-03-17 w . - H a O CON VOICE Editor Red First time home buyers tax credit. 5,000..............15 (Can split with spouse) Volunteer firefighters tax credit. 3,000............. 15 Search and Rescue volunteers tax credit.. 3,000 15 Home Accessibility Tax credit .10,000. 15 CPP(maximum) Amount paid...15 El(maximum) Amount paid..15 Pension...... 2,000 .... 15 Mental or physical impairment amount. .8,662...............15 (Can transfer to a dependant) Tuition amount.. Amount paid(can be transferred to a dependent or spouse or claimed by student in a subsequent tax year) Medical expenses............. Actual Medical Expenses :- LESS: Lesser of: (0) (ii) $2,421 3% of Division B Income Focus 42 ench (Canada) Text Predictions: On ENG us 2022 Accessibility: Investigate OL w E T Charitable donations.... 200. 15 then 29% on amounts over $200 Interest paid on student loans. 15% of actual Dividend Tax Credit... ..6/11 of grossed up dividends for public corporations with gross up of 38% and 9/13 for CCPC with gross up of 15% (An election can be made to transfer this credit to a spouse) Digital News subscription credit is 15% for up to $500 subscriptions Foreign Tax Credit. Lesser of: i. non-business income tax paid to a foreign country ii. Net non business foreign income divided by total Division B income times This number times tax for the year for Part 1 taxes Contribution Credit $400 or less.......... .75% of contribution More than $400 but not more than $750. $300+50% of contribution over $400 $475+one-third of contribution over $750 More than $750, but not more than $1275.. $650 More than $1275.. 1 Focus English (United States) Text Predictions: On Accessibility: Investigate ENG Us Any individual can transfer to the spouse any unused credits of:- i. Tuition ii. Age iii. Pension iv. Mental or physical impairment Taxo Old Age Security Benefits.:- Every resident in Canada is entitled to receive Old Age Security Benefits from the Federal Govt., once that resident is 65 years old. This amount received is clawed back(repayment to the Federal Govt.) at the end of the year depending on the Division income of that person. The Clawback is calculated as: Lesser of: Sxxx i. Old Age Security Benefits received Division B Income less $79,845. If there is an excess 15% of this amount reduces the ii. benefit. FA ! Focus lish (United States) Text Predictions on Accessibility: Investigate Any individual can transfer to the spouse any unused credits of:- i. Tuition ii. Age iii. Pension iv. Mental or physical impairment Taxo Old Age Security Benefits.:- Every resident in Canada is entitled to receive Old Age Security Benefits from the Federal Govt., once that resident is 65 years old. This amount received is clawed back(repayment to the Federal Govt.) at the end of the year depending on the Division income of that person. The Clawback is calculated as: Lesser of: Sxxx i. Old Age Security Benefits received Division B Income less $79,845. If there is an excess 15% of this amount reduces the ii. benefit. FA ! Focus lish (United States) Text Predictions on Accessibility: Investigate 1+ Canada Revenue Agency Agence du revenu du Canada Protected B when completed Income Tax and Benefit Return T1 2021 If this return is for a deceased person, enter their information on this page. Attach to your paper return only the documents that are requested to support your deduction, claim, or expense. Keep all other documents in case the Canada Revenue Agency (CRA) asks to see them later. See the guide for more information about supporting documents. Step 1 - Identification and other information ON 8 Identification Marital status on Social insurance December 31, 2021: First name Last name number (SIN) 10 Married Mailing address 2 Living common-law Date of birth (Year Month Day) PO Box RR 30 Widowed 4 0 Divorced City Prov./Terr. Postal code If this return is for a deceased person, enter the date of death (Year Month Day) 5 Separated Email Address 6 Single By providing an email address, you are registering to receive email notifications from the CRA and agree to the Terms of use in Step 1 of the guide. Your language of correspondence: Votre langue de correspondance : English Franais Residence information Your province or territory of residence on December 31, 2021: If you became a resident of Canada in 2021 for income tax purposes, enter your date of entry: (Month Day) Your current province or territory of residence if it is different than your mailing address above: If you ceased to be a resident of Canada in 2021 for income tax purposes, enter your date of departure: Province or territory where your business had a permanent establishment if you were self-employed in 2021: (Month Day) Your spouse's or common-law partner's information Their first name Their SIN Tick this box if they were self-employed in 2021. Net income from line 23600 of their return to claim certain credits (even if the amount is "0") Amount of universal child care benefit (UCCB) from line 11700 of their return Amount of UCCB repayment from line 21300 of their return Do not use this area. Do not use this area. 17200 17100 5006-R E (21) (Ce formulaire est disponible en franais.) Page 1 of 8 Protected B when completed Step 1 - Identification and other information (continued) 2 Elections Canada Elections Canada For more information, see "Elections Canada" in Step 1 of the guide. A) Do you have Canadian citizenship? If yes, go to question B. If no, skip question B. Yes 2 No B) As a Canadian citizen, do you authorize the Canada Revenue Agency to give your name, address, date of birth, and citizenship to Elections Canada to update the National Register of Electors or, if you are 14 to 17 years of age, the Register of Future Electors? 1 Yes 2 No Your authorization is valid until you file your next tax return. Your information will only be used for purposes permitted under the Canada Elections Act, which include sharing lists electors produced from the National Register of Electors with provincial and territorial electoral agencies, members of Parliament, registered and eligible political parties, and candidates at election time. Your information in the Register of Future Electors will be included in the National Register of Electors once you turn 18 and your eligibility to vote is confirmed. Information from the Register of Future Electors can be shared only with provincial and territorial electoral agencies that are allowed to collect future elector information. In addition, Elections Canada can use information in the Register of Future Electors to provide youth with educational information about the electoral process. Indian Act - Exempt income Tick this box if you have income that is exempt under the Indian Act. For more information about this type of income, go to canada.ca/taxes-indigenous peoples. If you ticked the box above, complete Form T90, Income Exempt from Tax under the Indian Act, so that the CRA can By providing an email address, you are registering to receive email notifications from the CRA and agree to the Terms of use in Step 1 of the guide. Your language of correspondence: Votre langue de correspondance : English Franais Residence information Your province or territory of residence on December 31, 2021: If you became a resident of Canada in 2021 for income tax purposes, enter your date of entry: (Month Day) Your current province or territory of residence if it is different than your mailing address above: If you ceased to be a resident of Canada in 2021 for income tax purposes, enter your date of departure: Province or territory where your business had a permanent establishment if you were self-employed in 2021: (Month Day) Your spouse's or common-law partner's information Their first name Their SIN Tick this box if they were self-employed in 2021. Net income from line 23600 of their return to claim certain credits (even if the amount is "0") Amount of universal child care benefit (UCCB) from line 11700 of their return Amount of UCCB repayment from line 21300 of their return Do not use this area. Do not use this area. 17200 17100 5006- RE (21) (Ce formulaire est disponible en franais.) Page 1 of 8 Protected B when completed Step 1 - Identification and other information (continued) Elections Canada Elections Canada For more information, see "Elections Canada" in Step 1 of the guide. A) Do you have Canadian citizenship? If yes, go to question B. If no, skip question B. Yes 2 No B) As a Canadian citizen, do you authorize the Canada Revenue Agency to give your name, address, date of birth, and citizenship to Elections Canada to update the National Register of Electors or, if you are 14 to 17 years of age, the Register of Future Electors? Yes 2 No Your authorization is valid until you file your next tax return. Your information will only be used for purposes permitted under the Canada Elections Act, which include sharing lists electors produced from the National Register of Electors with provincial and territorial electoral agencies, members of Parliament, registered and eligible political parties, and candidates at election time. Your information in the Register of Future Electors will be included in the National Register of Electors once you turn 18 and your eligibility to vote is confirmed. Information from the Register of Future Electors can be shared only with provincial and territorial electoral agencies that are allowed to collect future elector information. In addition, Elections Canada can use information in the Register of Future Electors to provide youth with educational information about the electoral process. Indian Act - Exempt income Tick this box if you have income that is exempt under the Indian Act. For more information about this type of income, go to canada.ca/taxes-indigenous peoples. If you ticked the box above, complete Form T90, Income Exempt from Tax under the Indian Act, so that the CRA can calculate your Canada workers benefit for the 2021 tax year, if applicable, and your family's provincial or territorial benefits. The information you provide on Form T90 will also be calculate your Canada training credit limit for the 2022 tax year. Foreign property Did you own or hold specified foreign property where the total cost amount of all such property, at any time in 2021, was more than CAN$100,000? 26600 1 Yes 2 No If yes, complete Form T1135, Foreign Income Verification Statement. There are substantial penalties for not filing Form T1135 by the due date. For more information, see Form T1135. 5006-R E (21) Page 2 of 8 The information you provide on Form T90 will also be used to calculate your Canada training credit limit for the 2022 tax year. Foreign property Did you own or hold specified foreign property where the total cost amount of all such property, at any time in 2021, was more than CAN$100,000? 26600 1 Yes 2 No If yes, complete Form T1135, Foreign Income Verification Statement. There are substantial penalties for not filing Form T1135 by the due date. For more information, see Form T1135. 5006-R E (21) Page 2 of 8 Protected B when completed Complete only the lines that apply to you, unless stated otherwise. You can find more information about the lines on this return by calling 1-800-959-8281 or by going to canada.ca/line-xXxxx and replacing "xxxxx" with any 5-digit line number from this return. For example, go to canada.ca/line-10100 for information about line 10100. 10400 + 2 3 11400 + 4 5 11600+ 6 7 8 9 10 Step 2 - Total income As a resident of Canada, you need to report your income from all sources inside and outside Canada. Employment income (box 14 of all T4 slips) 10100 Tax-exempt income for emergency services volunteers (see line 10100 of the guide) 10105 Commissions included on line 10100 (box 42 of all T4 slips) 10120 Wage-loss replacement contributions (see line 10100 of the guide) 10130 Other employment income (see line 10400 of the guide) Old age security (OAS) pension (box 18 of the T4A(OAS) slip) 11300 + CPP or QPP benefits (box 20 of the T4A(P) slip) Disability benefits included on line 11400 (box 16 of the T4A(P) slip) 11410 Other pensions and superannuation (see line 11500 of the guide and line 31400 of the return) 11500 + Elected split-pension amount (complete Form T1032) Universal child care benefit (UCCB) (see the RC62 slip) 11700 + UCCB amount designated to a dependant 11701 Employment insurance and other benefits (box 14 of the T4E slip) 11900 + Employment insurance maternity and parental benefits, and provincial parental insurance plan benefits 11905 Taxable amount of dividends from taxable Canadian corporations (use Federal Worksheet): Amount of dividends (eligible and other than eligible) 12000 + Amount of dividends (other than eligible) 12010 Interest and other investment income (use Federal Worksheet) 12100 + Net partnership income (limited or non-active partners only) Registered disability savings plan income (box 131 of the T4A slip) 12500 + Rental income (see Guide T4036) Gross 12599 Net 12600 + Taxable capital gains (complete Schedule 3) 12700 + Support payments received (see Guide P102) Total 12799 Taxable amount 12800 + Registered retirement savings plan (RRSP) income (from all T4RSP slips) 12900 + Other income (specify) 13000 + Taxable scholarships, fellowships, bursaries, and artists' project grants 13010+ Add lines 1 to 18. Self-employment income (see Guide T4002): Business income Gross 13499 Net 13500 20 Professional income Gross 13699 Net 13700 + 21 Commission income Gross 13899 Net 13900 + 22 Farming income Gross 14099 Net 14100 + 23 Fishing income Gross 14299 Net 14300 + 24 Add lines 20 to 24. Net self-employment income Line 19 plus line 25 Workers' compensation benefits (box 10 of the T5007 slip) 14400 27 Social assistance payments 14500 + 28 Net federal supplements paid (box 21 of the T4A(OAS) slip) 14600 + 29 Add lines 27 to 29 (see line 25000 in Step 4). 14700 = Line 26 plus line 30 Total income 15000 12200 + 11 12 13 14 15 16 17 18 19 + 25 = 26 + 30 31 5006-R E (21) Page 3 of 8
