The following information for 2020 has been presented to you by Paula Promoter, the new vicepresident of marketing for a public Canadian oil company, Overpriced Petroleum Limited. Paula, who is 52 years old and now lives in Calgary, travels extensively across Canada. Paula, whose duties involve the negotiating of contracts, began her employment with Overpriced Petroleum on January 1, 2019.

Receipts and Fringe Benefits 2020

Salary net of payroll deductions ............................... . $ 50,450

Director fees ............................................... . 5,000

Receipt of an amount, not to compete, from former employer .......... . 50,000

Termination payment from former employer ....................... . 8,000

Travel allowance (Note (1) below): Accommodation and meals @ $200 per day for 150 days ............. . 30,000

Car operating cost allowance @ 45 per kilometre plus $10 per day of travelling for business travel only (9,000 kilometres) for 150 days .... . 5,550

Income protection receipts received from Regal Assurance (Note (2) below) 15,000

Benefits paid by the corporation:

Registered pension plan ............................ . $ 4,000

Extended health care Liberty Mutual ................ . 2,125

Group income protection premiums Regal Assurance (Note (2) below) ................ . 1,050 Membership fee in Petroleum Club (membership required by all employees)

initiation fee ................................ . 1,000

annual fee .................................. . 2,500

Moving costs (Note (3) below) ....................... . 42,000

Group term life insurance (coverage is $300,000) ......... . 600

Loans by company (Note (4) below) .................. . 160,000 $213,275

$377,275

Payroll deductions and selected disbursements 2020

Payroll deductions:

Income taxes withheld ............................. . $ 41,001

Registered pension plan (defined benefit) current contribution .......................... . 4,000 Canada Pension Plan contributions .................... . 2,749

Employment insurance contributions .................. . 860

Group income protection premiums (Note (2)) ........... . 1,050 $ 49,660

Purchased 2,000 common shares on July 1, 2020 under a stock option plan at a price of $25 per share. Fair market value of shares at the date of purchase was $35. Fair market value of the shares was $25 per share on the date when the option was granted ..............................50,000

Legal fees paid in connection with the collection of the $50,000 noncompetition receipt from her previous employer ............ . 5,000

Notes and Additional Information:

(1) Paula's actual travelling and car expenses, which she is required to pay according to the terms of her employment contract, are as follows:

Meals ..................................................... . $11,250

Accommodation .............................................. . 23,750

Travel costs (other than car see below) reimbursed by company ......... . 6,000

Car expenses (9,000 kilometres for business purposes out of total kilometres of 16,000): Gasoline ......................................... . $1,700

Maintenance ..................................... . 800

Auto accident costs while on a business trip 1,600

Insurance ........................................ . 1,800

Licence ......................................... . 90

Interest paid on car loan (see Note (4), below) ........... . 300

$6,290

(2) The company paid 50% of the premium to Regal Assurance re income protection payment. During 2020, Paula received $15,000 in periodic payments in respect of an eight week illness.

(3) Although Paula started to work for Overpriced Petroleum on January 1, 2019, her family did not move to Calgary from Toronto until February 28, 2019. The company paid for all the moving costs of $12,000, an actual loss on the sale of Paula's Toronto home of $25,000 and a disruption allowance of $5,000.

(4) Paula obtained two loans from the company as part of her employment contract:

(a) Loan of $150,000, dated July 1, 2019, to acquire a new home in Calgary. The loan bears annual interest at 2% and is repayable over a 25-year period in equal annual instalments on the anniversary date of July 1. Interest is payable on the same date.

(b) Loan of $10,000, dated January 1, 2019, to assist in the acquisition of a car acquired in early January 2020 for $35,000 (excluding GST; no PST in Alberta) to be used in connection with her duties of employment. The loan bears annual interest at 3%, and is repayable over the next three years in equal annual instalments. Interest is payable December 31 each year. Paula paid the interest for 2020 on time on December 31, 2019.

(NOTE: For simplicity you may assume that the prescribed interest rate is a constant 4% for all quarters.)

Determine Paula Promoter's employment income for 2020 in accordance with Subdivision a of Division B. Ignore the effects of a leap year in your answer.

Indicate why you have excluded any of the above amounts from your answer.