Assignment Problem Six - 14 (Comprehensive Case Covering Chapters 1 to 6) Ms. Lacy Compton is a 45 year old widow with two children: John Her son, John, is 22 years old and, because he has been blind since birth, he lives with her in a residence that she owns. He qualifies for the disability tax credit and has no income of his own during 2020. Allison Her 17 year old daughter, Allison, has just started university and, during 2020, she attended on a full time basis for four months. Her tuition fees that were paid during 2020 were $2,850. As she is attending a local university, Allison lives in her mother's home throughout 2020. Allison has no income of her own and she intends to transfer her tuition credit to her mother. Business Assignment Problems 297 are During 2020, her family's qualifying medical expenses are as follows: Allison Lacy John Total $ 4,220 11,500 2,180 $17,900 During 2020, Ms. Compton makes donations to registered charities of $1.250, as well as contributions to registered federal political parties in the amount of $350. Sy is $68,000. In addition, she earns $13,500 in commissions during the year. For the year Ms Compton is employed as a salesperson by a large Canadian public company. For 2020, her ending December 31, 2020, her employer withholds the following amounts from her income: RPP Contributions El Premiums CPP Contributions Professional Association Dues Payments For Personal Use Of Employer's Car $2,800 856 2,898 250 1.800 Ms. Compton's employer makes a matching contribution of $2,800 to her RPP The car that she used during 2020 cost her employer $32,000. During 2020, it was used by her employment-related activities. During the one month that she did not use the car, her employer for 17 months of the year. It was driven a total of 27,000 kilometres, of which 22,500 was for required that she return it to the company garage. occupied 15 percent of the floor space in her home. The cost of the house (excluding the land) She is required by her employer to maintain an office in her home. During 2020, this office is $335,000. Her 2020 costs for 100 percent of the floor space were as follows: Mortgage Interest Property Taxes Utilities And Maintenance Insurance 1,100 425 Total $9,775 $5,800 2,450 in conjunction with her sales activities, she incurred costs for meals and entertainment of $4,350. These were not reimbursed by her employer. In addition to her employment activities, Ms. Compton owns and manages an unincorporated retail business. The fiscal year of the business ends on December 31 and, for 2020, the business had accounting Net Income of $53,500. Other information related to the business is as follows: 1. As the business is unincorporated, no taxes were deducted in calculating Net Income. 2. During 2020, the business spent $8,600 landscaping its premises. For accounting pur- poses, this amount is being amortized over 10 years on a straight-line basis. 3. At the beginning of 2020, Ms. Compton owned depreciable assets used in the business with the following UCC balances: Class 1 Class 8 Class 10 January 1, 2020, UCC $233,000 $41,500 $27,000 The Class 1 building was acquired in 2005. 4 In March 2020, Class 8 assets with a cost of $12,000 were sold for $8,600. They were replaced by Class 8 assets with a cost of $13,400. The Net Income figure is after the deduction of Amortization Expense of $12,800 and $6,000 in meals and entertainment with clients of the business. The Amortization Expense includes the amortization of the landscaping costs. Required: Calculate Ms. Compton's 2020 Net Income For Tax Purposes, her 2020 Taxable Income, and her minimum 2020 federal Tax Payable without consideration of any income tax withheld by her employer. Ignore GST and PST considerations. Assignment Problem Six - 14 (Comprehensive Case Covering Chapters 1 to 6) Ms. Lacy Compton is a 45 year old widow with two children: John Her son, John, is 22 years old and, because he has been blind since birth, he lives with her in a residence that she owns. He qualifies for the disability tax credit and has no income of his own during 2020. Allison Her 17 year old daughter, Allison, has just started university and, during 2020, she attended on a full time basis for four months. Her tuition fees that were paid during 2020 were $2,850. As she is attending a local university, Allison lives in her mother's home throughout 2020. Allison has no income of her own and she intends to transfer her tuition credit to her mother. Business Assignment Problems 297 are During 2020, her family's qualifying medical expenses are as follows: Allison Lacy John Total $ 4,220 11,500 2,180 $17,900 During 2020, Ms. Compton makes donations to registered charities of $1.250, as well as contributions to registered federal political parties in the amount of $350. Sy is $68,000. In addition, she earns $13,500 in commissions during the year. For the year Ms Compton is employed as a salesperson by a large Canadian public company. For 2020, her ending December 31, 2020, her employer withholds the following amounts from her income: RPP Contributions El Premiums CPP Contributions Professional Association Dues Payments For Personal Use Of Employer's Car $2,800 856 2,898 250 1.800 Ms. Compton's employer makes a matching contribution of $2,800 to her RPP The car that she used during 2020 cost her employer $32,000. During 2020, it was used by her employment-related activities. During the one month that she did not use the car, her employer for 17 months of the year. It was driven a total of 27,000 kilometres, of which 22,500 was for required that she return it to the company garage. occupied 15 percent of the floor space in her home. The cost of the house (excluding the land) She is required by her employer to maintain an office in her home. During 2020, this office is $335,000. Her 2020 costs for 100 percent of the floor space were as follows: Mortgage Interest Property Taxes Utilities And Maintenance Insurance 1,100 425 Total $9,775 $5,800 2,450 in conjunction with her sales activities, she incurred costs for meals and entertainment of $4,350. These were not reimbursed by her employer. In addition to her employment activities, Ms. Compton owns and manages an unincorporated retail business. The fiscal year of the business ends on December 31 and, for 2020, the business had accounting Net Income of $53,500. Other information related to the business is as follows: 1. As the business is unincorporated, no taxes were deducted in calculating Net Income. 2. During 2020, the business spent $8,600 landscaping its premises. For accounting pur- poses, this amount is being amortized over 10 years on a straight-line basis. 3. At the beginning of 2020, Ms. Compton owned depreciable assets used in the business with the following UCC balances: Class 1 Class 8 Class 10 January 1, 2020, UCC $233,000 $41,500 $27,000 The Class 1 building was acquired in 2005. 4 In March 2020, Class 8 assets with a cost of $12,000 were sold for $8,600. They were replaced by Class 8 assets with a cost of $13,400. The Net Income figure is after the deduction of Amortization Expense of $12,800 and $6,000 in meals and entertainment with clients of the business. The Amortization Expense includes the amortization of the landscaping costs. Required: Calculate Ms. Compton's 2020 Net Income For Tax Purposes, her 2020 Taxable Income, and her minimum 2020 federal Tax Payable without consideration of any income tax withheld by her employer. Ignore GST and PST considerations