Freehand Foods, an Alberta organization, is preparing its year-end information slips. Jessie had worked for the company in their Calgary office from July 1982 until her employment was terminated in November of this year.

When her employment was terminated, she was fully vested in the companys defined contribution registered pension plan, which she joined in July 1984. Upon termination of employment, Jessie received a retiring allowance of $50,000.00.

Jessie had her employer transfer the entire eligible amount to a RRSP and took the non-eligible amount in cash. Calculate the eligible and non-eligible portions of Jessies retiring allowance as well as the income tax withheld on the amount received in cash. Include these amounts when completing Jessies T4 slip.

The $23,040.00 income tax shown on the year-end payroll register does not include the tax amount withheld on the retiring allowance. Complete Jessies T4 using the information from the year-end payroll register. Note: The boxes in the Other Information area of the T4 must be completed in numerical order.

Item Amount

Regular earnings $ 57,600.00

Vacation pay $ 6,528.00

Bonus pay $ 3,000.00

Overtime pay $ 690.34 Taxable clothing allowance $ 825.00

Wages in lieu of notice $ 15,350.00

Retiring allowance $ 50,000.00 CPP contributions $ 2,898.00

EI premiums $ 856.36

Income tax $ 23,040.00

CPP pensionable earnings $ 55,200.00

EI insurable earnings $ 54,200.00

Union dues $ 580.00

Charitable donations $ 325.00 Employee contributions to the Registered Pension Plan $ 4,250.00

Employer contributions to the Registered Pension Plan $ 3,925.00

Registered Pension Plan number 1234567

Loan interest non-cash taxable benefit $ 1,639.85