Read the below scenario to answer Questions 11 to 19:

Olin Packett has been employed for over 10 years by a large Canadian public corporation. He works in their Victoria office.

For the 2021 year, his gross salary is $75,000. While he does not receive commissions, he was awarded a bonus of $15,000 during 2021 based on his sales performance. One-half of this is paid in December 2021, with the balance to be paid in February, 2022.

During 2021, Olin's employer withheld the following amounts from his gross wages:

Federal Income Tax $14,350

Employment Insurance Premiums 890

Canada Pension Plan Contributions 2,876

Registered Pension Plan Contributions 3,100

Donations to The United Way 750

Union Dues 275

Premiums for Group Life Insurance Policy 423

Other Information:

1 Olin is provided with a car that the company leases at a rate of $723 per month, which already includes GST and PST. The company pays for all of the operating costs of the car and these amounted to $4,200 during 2021. Olin drove the car a total of 33,000 kilometers, 27,500 kilometers of which were carefully documented as employment related travel. While he was in the hospital for 2 months (see Item 4), his employer required that the car be returned to company premises.

2 Olin was granted options to acquire 500 shares of his employer's common stock at a price of $31.00 per share 2 years ago. On the date the options were granted, the shares were trading at $29.50 per share. These options were exercised by Olin on February 16, 2021 when the shares were trading at $34.75 per share. Olin does not plan to sell the shares for at least 2 years.

3 In order to assist Olin in acquiring a new residence in Victoria, his employer granted him a three-year, interest free loan of $175,000. The loan was granted on July 1, 2021 and, at this point in time, the interest rate on open five-year mortgages was 4.5 percent. Assume the relevant prescribed rate was 2 percent on this date. Olin purchases a house for $327,000 on October 2, 2021.

4 On his birthday, Olin received several gifts including a hoverboard and drone. In his enthusiasm for his new toys, he flew the drone over his neighbor's swimming pool while maneuvering the hoverboard on the sidewalk in front of the two homes to watch it. The result was a concussion, a broken leg, a shattered wrist and a drowned drone. He was unable to work for a period of two months. As his employer provides disability insurance coverage, he received benefit during this period totaling $8,500. All of the premiums for this insurance plan are paid for by the employer and totaled $560 for 2021. The plan provides periodic benefits that compensate for lost employment income.

5 Olin's employer made a matching payment to the group life insurance policy. The premiums for 2021 on his behalf totalled $423.

Question 11 (2 points)

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In the case, what items will affect the calculation from Net Income to Taxable Income? (Can select multiple answers)

Question 11 options:

	Stock option deduction
	CPP deduction
	Registered pension plan (RPP)
	Union dues

Question 12 (3 points)

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What is the Loan Benefit added to net employment income?

Question 12 options:

a)

$875

b)

$2,188

c)

$3,500

d)

$175,000

e)	None of the above

Question 13 (1 point)

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How does the Life Insurance affect net income?

Question 13 options:

a)

No change

b)

Add $423

c)

Less $423

d)	Add $8,077

Question 14 (2 points)

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Assuming Standby Charge is $5,000, what would be the Operating Cost Benefit in this case?

Question 14 options:

a)

$1,485

b)

$2,500

c)	None of the above

d)

$5,000

e)

$7,425

Question 15 (4 points)

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What is the Standby Charge poriton of the Automobile Benefit added to net employment income?

Question 15 options:

a)

$1,590

b)

$9,542

c)

$7,230

d)

$4,820

e)	None of the above

Question 16 (3 points)

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What Salary & Bonus total amount should be included into net employment income?

Question 16 options:

a)

$0

b)

$75,000

c)

$82,500

d)

$90,000

e)	None of the above

Question 17 (3 points)

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Which of the following are employment deductions? (Can select multiple answers)

Question 17 options:

	Registered pension plan (RPP)
	Union dues
	CPP contributions
	Federal income tax
	EI premiums
	Donations

Question 18 (2 points)

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What is the Stock Option Benefit that is added to Net Income?

Question 18 options:

a)

$750

b)

$938

c)

$1,875

d)

$2,625

e)	None of the above

Question 19 (2 points)

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How does the Disability Insurance affect net employment income?

Question 19 options:

a)	Add $7,940

b)	Less $7,940

c)	Add $8,500

d)	Less $8,500

e)	None of the above

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