Taxation

Taxation PROJECT 2 (55 MARKs) This is the second of two projects that you must complete during this course. Project 2 covers course content up to Week 5 and is due at the end of Week 5. It is recommended that you read the project details in conjunction with the student course notes to identify areas that pertain to specific events or transactions presented in the project There are two questions in this project. Question 1 involves the calculation of net income and taxable income and federal taxes payable for the Parsons family. Question 2 involves the calculation of net income, taxable income and federal taxes payable for WD Office Supplies Ltd., a CCPC. QUESTION 1 (29.5 MARKS) The Parsons family is made up of Reggie, who works for a company owned by his parents, his wife Megan and their two children. Cassie is five years old and her brother David is 13 years old. They also support Reggie's grandmother, Imelda (age 97), who lives with them and who is physically infirm. Reggie earns a salary of $77,456 per year from his parent's company. He worked for his parents all year in 2017, He also owns 20% of the shares in the company. He received a non-eligible dividend of $65,000 from the company during the year, as well a capital dividend of $25,000. The company deducted the following amounts from Reggie's pay during the year .Canada Pension Plan (CPP) $2,564 Employment Insurance (El) $836 . income taxes- $15,000 Reggie and Megan decided to purchase a beautiful new waterfront property in Halifax. Both their original home and their cottage were in Reggie's name, and both were sold. The proceeds from selling these properties were used to purchase the new property for $1,500,000. They moved in on December 31, 2017 215 Taxation PROJECT 2 (55 MARKs) This is the second of two projects that you must complete during this course. Project 2 covers course content up to Week 5 and is due at the end of Week 5. It is recommended that you read the project details in conjunction with the student course notes to identify areas that pertain to specific events or transactions presented in the project There are two questions in this project. Question 1 involves the calculation of net income and taxable income and federal taxes payable for the Parsons family. Question 2 involves the calculation of net income, taxable income and federal taxes payable for WD Office Supplies Ltd., a CCPC. QUESTION 1 (29.5 MARKS) The Parsons family is made up of Reggie, who works for a company owned by his parents, his wife Megan and their two children. Cassie is five years old and her brother David is 13 years old. They also support Reggie's grandmother, Imelda (age 97), who lives with them and who is physically infirm. Reggie earns a salary of $77,456 per year from his parent's company. He worked for his parents all year in 2017, He also owns 20% of the shares in the company. He received a non-eligible dividend of $65,000 from the company during the year, as well a capital dividend of $25,000. The company deducted the following amounts from Reggie's pay during the year .Canada Pension Plan (CPP) $2,564 Employment Insurance (El) $836 . income taxes- $15,000 Reggie and Megan decided to purchase a beautiful new waterfront property in Halifax. Both their original home and their cottage were in Reggie's name, and both were sold. The proceeds from selling these properties were used to purchase the new property for $1,500,000. They moved in on December 31, 2017 215