or tax purposes is cor purposes, and briefly Required: Advise Fontaine whether his calculation of 20X1 net income for tax rect. If it is not, recalculate a revised 20X1 net income for tax purpose explain the changes you made. ved from Calgary to roe public corporation, tance in determining the following financial PROBLEM EIGHT On January 2, 20X3, Sheldon Bass, a professional engineer, moved from Edmonton to commence employment with Acco Ltd., a large public co Because of his new employment contract, Bass requires assistance in deta his employment Income for tax purposes. He has provided the following fir information: 1. Bass's salary in 20x3 was $95,000. From this, Acco deducted the appropr income tax, Employment Insurance premiums of $860, Canada Pensione contributions of $2.749, registered pension plan payments of $6,000, and cha Itable donations of $1,200. 2. Acco provides its executives with a bonus plan. Bass's 20X3 bonus was $20,000, of which $5,000 was received in December 20X3 and the balance in March 20X4. 3. In November 20X3, Bass asked his employer to loan him $12,000 so that he could acquire an investment. Acco advised him that it was company policy not to make loans to employees. However, they gave him the $12,000, stipulating that it was an advance against his 20X4 salary, which would be reduced accordingly. 4. In 20X3, Bass was provided with a company car, which he drove 14.000 km for employment duties and 8,000 km for personal use. The car was leased at $500 per month. The total operating costs of $7,000 were paid by Acco. The car was available for personal use throughout the year. 5. Bass's moving expenses to transport his belongings to Edmonton were $3,000. Acco paid this cost directly to a moving company on Bass's behalf. 6. Bass travels extensively for Acco. In December 20X3, he and his spouse used some of the travel points he had accumulated from this travel to attend his father's funeral in Toronto. As a result, he saved the normal airfare of $400 per ticket 7. Acco paid the following additional amounts for Bass: Allowance ($300 per month) for acquiring executive apparel Investment counsellor fees as part of Acco's counselling program Golf club dues (Bass rarely uses the club to conduct business) $3,600 600 1,500 8. In 20X3 Bass paid for the following: Dues to the engineers' association Laptop computer and printer Computer supplies (paper, etc.) $ 800 2,200 100 Acco had asked each senior executive to acquire a laptop computer at their own expense for work during travel. 9. In 20X3, Bass sold 1,000 shares of Kolex Ltd. (his former employer) at $10 per share. Kolex is a Canadian-controlled private corporation. The shares were pur- chased under a stock-option plan in 20x0 at $3 per share. Appraised value at that time was $5 per share
