Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

that's all the information provided in the question. Yuen Li was terminated from his employment with Exit Ltd. In July 2020. In November, he began

image text in transcribed

that's all the information provided in the question.

Yuen Li was terminated from his employment with Exit Ltd. In July 2020. In November, he began work as a commission salesperson for Kolex Ltd., a Canadian public corporation. Yuen has asked you to help him prepare his 2020 tax return. Information regarding his employment for 2020 is outlined below. 1. Yuen's employment with Exit was terminated on July 31,. His salary to that date was $61,600. Besides Income tax, Exit had deducted the following amounts from his salary: Registered pension plan El and CPP contributions Group sickness and accident Insurance plan premium $4,400 3,609 600 Exit also contributed $4,400 to an RPP and $600 to a group sickness and accident Insurance plan on Yuen's behalf. Yuen took a medical stress leave from January 10 to March 15. His salary was not paid during the leave. However, he received $5,000 for loss of earnings from the group sickness and accident Insurance plan. previous years, Yuen had pald a total of $3,300 In premiums to the plan. 2. On July 31, Yuen returned the company car to Exit, which had been available for his personal use. The car had an original cost of $36,800 and a book value of $24,000. Yuen had driven the car 20,000 km in 2020, of which 8,400 km was for employment purposes. Exit pald the operating expenses of $2.900. 3. When employment was terminated, Yuen paid a lawyer $900 to settle compensation issues. As a result, he received additional holiday pay of $1,100 and a retiring allowance of $6,600 for his 10 years of service. 4. Yuen collected employment Insurance of $5,400 before starting his employment with Kolex on November 1. 5. Besides a base salary of $1,100 per month, Yuen receives commissions on sales. His commission is 4% of sales. His first sales were made in late December and totalled $150,000. The related commission was received on January 15, 2021. On December 1, 2020, Kolex paid Yuen $1,500 as an advance against commissions. 6. Kolex certified that Yuen was required to pay his own car and other expenses. On November 1, he leased a car at $1,100 per month (including 13% sales tax). Operating expenses for November and December were $1,000 in total. The car was used 70% of the time for employment purposes. 7. In December, Yuen sold 4,400 shares of Kolex Ltd. at $10 per share. He had acquired them in November under a stock-option plan at $6. At the time of acquisition, the shares were valued at $8 per share. When the option was granted, the shares were valued at $6 per share. 8. Yuen incurred the following additional expenses: Entertainment-meals and beverages Promotion-gift calendars for customers Purchase of a cellular phone $700 200 600 Required: Determine Yuen's net Income from employment for the 2020. Stock option benefit Car lease expense Car operating benefit Car operating expense Holiday pay Registered Pension Plan (RPP) Car Standby benefit Salary: Exit Ltd Commission advance Disability Benefits Salary: Kolex Ltd Legal - Salary dispute Net Employment Income 0 Yuen Li was terminated from his employment with Exit Ltd. In July 2020. In November, he began work as a commission salesperson for Kolex Ltd., a Canadian public corporation. Yuen has asked you to help him prepare his 2020 tax return. Information regarding his employment for 2020 is outlined below. 1. Yuen's employment with Exit was terminated on July 31,. His salary to that date was $61,600. Besides Income tax, Exit had deducted the following amounts from his salary: Registered pension plan El and CPP contributions Group sickness and accident Insurance plan premium $4,400 3,609 600 Exit also contributed $4,400 to an RPP and $600 to a group sickness and accident Insurance plan on Yuen's behalf. Yuen took a medical stress leave from January 10 to March 15. His salary was not paid during the leave. However, he received $5,000 for loss of earnings from the group sickness and accident Insurance plan. previous years, Yuen had pald a total of $3,300 In premiums to the plan. 2. On July 31, Yuen returned the company car to Exit, which had been available for his personal use. The car had an original cost of $36,800 and a book value of $24,000. Yuen had driven the car 20,000 km in 2020, of which 8,400 km was for employment purposes. Exit pald the operating expenses of $2.900. 3. When employment was terminated, Yuen paid a lawyer $900 to settle compensation issues. As a result, he received additional holiday pay of $1,100 and a retiring allowance of $6,600 for his 10 years of service. 4. Yuen collected employment Insurance of $5,400 before starting his employment with Kolex on November 1. 5. Besides a base salary of $1,100 per month, Yuen receives commissions on sales. His commission is 4% of sales. His first sales were made in late December and totalled $150,000. The related commission was received on January 15, 2021. On December 1, 2020, Kolex paid Yuen $1,500 as an advance against commissions. 6. Kolex certified that Yuen was required to pay his own car and other expenses. On November 1, he leased a car at $1,100 per month (including 13% sales tax). Operating expenses for November and December were $1,000 in total. The car was used 70% of the time for employment purposes. 7. In December, Yuen sold 4,400 shares of Kolex Ltd. at $10 per share. He had acquired them in November under a stock-option plan at $6. At the time of acquisition, the shares were valued at $8 per share. When the option was granted, the shares were valued at $6 per share. 8. Yuen incurred the following additional expenses: Entertainment-meals and beverages Promotion-gift calendars for customers Purchase of a cellular phone $700 200 600 Required: Determine Yuen's net Income from employment for the 2020. Stock option benefit Car lease expense Car operating benefit Car operating expense Holiday pay Registered Pension Plan (RPP) Car Standby benefit Salary: Exit Ltd Commission advance Disability Benefits Salary: Kolex Ltd Legal - Salary dispute Net Employment Income 0

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing and Assurance Services Understanding the Integrated Audit

Authors: Karen L. Hooks

1st edition

471726346, 978-0471726340

More Books

Students also viewed these Accounting questions

Question

Do you think DeShawn has a problem with alcohol? Why or why not?

Answered: 1 week ago

Question

How many types of bankruptcy and these types explained in Chapters?

Answered: 1 week ago

Question

L A -r- P[N]

Answered: 1 week ago

Question

b. A workshop on stress management sponsored by the company

Answered: 1 week ago