Ahmed also advises you that he sold a piece of vacant land at a significant loss this year. He had planned to build a rental property on the land but learned after purchasing it that it was highly polluted. The cost of this land was $200,000, and it was sold for $30,000 in 2019.

4.

Ahmed has a T5 slip from 2019 indicating that he earned an eligible dividend of $20,000 and interest income of $300.

5.

For the 2019 taxation year, Ahmed made RRSP contributions of $3,000. This is his first RRSP contribution, and his RRSP deduction limit for 2019 is $120,000.

6. Ahmed pays spousal support payments to his ex-wife of $500 per month pursuant to a legal agreement. He is behind in his payments and was only able to pay $3,500 in 2019.

Required: a)

Calculate the following for the 2019 taxation year. Provide explanations for omitted amounts.

i) Ahmeds rental income and any taxable capital gains and allowable capital losses from the sale of the real estate properties that he sold during 2019 (4.5 marks)

ii) Ahmeds deductible moving expenses (4.5 marks)

b) Calculate net income for tax purposes for Ahmed for 2019. (6.5 marks)

c) Determine Ahmeds estimated RRSP deduction limit for 2020. (4.5 marks)

Note: Round all amounts to the nearest dollar and ignore GST and provincial taxes. Show the full detail of all steps in your calculations, even if the result is zero

Question 4 Consolidated statement of comprehensive income Note: Add additional rows/columns to the worksheet if required. NOTE: Copy and paste this template into the Excel file that you are going to submit; do not complete your work in this file. Canaan's Curios Corp. Consolidated statement of comprehensive income For the year ended December 31, 20X7 ADJ ADJ ADJ ADJ ADJ Consolidated Reference(s) Sales revenue Cost of goods sold Gross profit Sales, general, and administrative expenses Interest expense Depreciation and amortization expense CCC TJI $3,500,000 $885,000 1,969,000 440,000 1,531,000 445,000 1,042,000 361,000 248,000 27,000 77,000 25,000 164,000 32,000 170,000 135,000 334,000 167,000 66,000 33,000 $268,000 $134,000 Other income Earnings before income tax expense Income tax expense Consolidated net income Question 4 Consolidated statement of financial position Note: Add additional rows/columns to the worksheet if required. NOTE: Copy and paste this template into the Excel file that you are going to submit; do not complete your work in this file. Canaan's Curios Corp. Consolidated statement of financial position As at December 31, 20X7 CCC ADJ ADJ ADJ Consolidated Reference(s) Cash Accounts receivable Inventory Notes receivable Land Building (net) Equipment (net) Patent Investment Total assets TJI $481,000 $68,000 588,000 75,000 190,000 74,000 60,000 0 450,000 325,000 803,000 285,000 1,000,000 232,000 450,000 30,000 350,000 $4,372,000 $1,089,000 Accounts payable Notes payable Long-term debt Bonds payable Common shares Retained earnings Total liabilities and equity $72,000 $52,000 0 50,000 1,310,000 300,000 500,000 250,000 830,000 180,000 1,660,000 257,000 $4,372,000 $1,089,000 QUESTION 4 (20 MARKS) It is late March 2020. You have just met with your client Ahmed about his taxes. Ahmed has several tax issues for the 2019 taxation year that he needs your help with. 1. Ahmed has two T4 slips from 2019, as he moved during the year: Ontario Nova Scotia employer employer Employment income $62,200 $65,000 CPP deducted 2,749 2,749 El deducted 860 860 RPP contributions 2,500 1,500 Pension adjustment 4,000 3,000 Income tax deducted 12,000 12,500 2. Ahmed and his daughter Zeinab moved from Ontario to Nova Scotia during 2019 for work, which he began right away. Their moving expenses include the following items: Movers - packing and transporting furniture and belongings $6,000 Selling costs of Ontario home 4,000 Legal costs to acquire new home in Nova Scotia 1,250 Costs related to vacant former home while up for sale 5,500 Costs to repaint new home 4,000 Gas to drive family car to Nova Scotia 200 Two nights in hotel for the family 400 Meals during the trip to Nova Scotia 200 3. Ahmed owned a rental property in Toronto for several years. The property cost $500,000, with $150,000 allocated to the land and $350,000 for the building. It was put up for sale at the end of 2018 and was sold in July 2019 for $650,000, with $175,000 allocated to the land. The UCC balance on December 31, 2018, was $322,000. In anticipation of the sale, the tenant had moved out on December 31, 2018, and the property had been vacant until it was sold. Ahmed used the proceeds of the sale to purchase another residential rental property in Halifax on August 1, 2019. He does not want to defer any gains or recapture. Ahmed gave you the following income and expenses for this property for the year, along with its cost: Rental income $ 30,000 Total expenses 36,000 Total cost of property 480,000 Portion of cost allocated to land 80,000 Question 4 Consolidated statement of comprehensive income Note: Add additional rows/columns to the worksheet if required. NOTE: Copy and paste this template into the Excel file that you are going to submit; do not complete your work in this file. Canaan's Curios Corp. Consolidated statement of comprehensive income For the year ended December 31, 20X7 ADJ ADJ ADJ ADJ ADJ Consolidated Reference(s) Sales revenue Cost of goods sold Gross profit Sales, general, and administrative expenses Interest expense Depreciation and amortization expense CCC TJI $3,500,000 $885,000 1,969,000 440,000 1,531,000 445,000 1,042,000 361,000 248,000 27,000 77,000 25,000 164,000 32,000 170,000 135,000 334,000 167,000 66,000 33,000 $268,000 $134,000 Other income Earnings before income tax expense Income tax expense Consolidated net income Question 4 Consolidated statement of financial position Note: Add additional rows/columns to the worksheet if required. NOTE: Copy and paste this template into the Excel file that you are going to submit; do not complete your work in this file. Canaan's Curios Corp. Consolidated statement of financial position As at December 31, 20X7 CCC ADJ ADJ ADJ Consolidated Reference(s) Cash Accounts receivable Inventory Notes receivable Land Building (net) Equipment (net) Patent Investment Total assets TJI $481,000 $68,000 588,000 75,000 190,000 74,000 60,000 0 450,000 325,000 803,000 285,000 1,000,000 232,000 450,000 30,000 350,000 $4,372,000 $1,089,000 Accounts payable Notes payable Long-term debt Bonds payable Common shares Retained earnings Total liabilities and equity $72,000 $52,000 0 50,000 1,310,000 300,000 500,000 250,000 830,000 180,000 1,660,000 257,000 $4,372,000 $1,089,000 QUESTION 4 (20 MARKS) It is late March 2020. You have just met with your client Ahmed about his taxes. Ahmed has several tax issues for the 2019 taxation year that he needs your help with. 1. Ahmed has two T4 slips from 2019, as he moved during the year: Ontario Nova Scotia employer employer Employment income $62,200 $65,000 CPP deducted 2,749 2,749 El deducted 860 860 RPP contributions 2,500 1,500 Pension adjustment 4,000 3,000 Income tax deducted 12,000 12,500 2. Ahmed and his daughter Zeinab moved from Ontario to Nova Scotia during 2019 for work, which he began right away. Their moving expenses include the following items: Movers - packing and transporting furniture and belongings $6,000 Selling costs of Ontario home 4,000 Legal costs to acquire new home in Nova Scotia 1,250 Costs related to vacant former home while up for sale 5,500 Costs to repaint new home 4,000 Gas to drive family car to Nova Scotia 200 Two nights in hotel for the family 400 Meals during the trip to Nova Scotia 200 3. Ahmed owned a rental property in Toronto for several years. The property cost $500,000, with $150,000 allocated to the land and $350,000 for the building. It was put up for sale at the end of 2018 and was sold in July 2019 for $650,000, with $175,000 allocated to the land. The UCC balance on December 31, 2018, was $322,000. In anticipation of the sale, the tenant had moved out on December 31, 2018, and the property had been vacant until it was sold. Ahmed used the proceeds of the sale to purchase another residential rental property in Halifax on August 1, 2019. He does not want to defer any gains or recapture. Ahmed gave you the following income and expenses for this property for the year, along with its cost: Rental income $ 30,000 Total expenses 36,000 Total cost of property 480,000 Portion of cost allocated to land 80,000