Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The following information relates to Perry Somer's nancial affairs in 2020: 1. Perry is employed as a salesperson and is remunerated by commissions. He must

image text in transcribedimage text in transcribedimage text in transcribed
The following information relates to Perry Somer's nancial affairs in 2020: 1. Perry is employed as a salesperson and is remunerated by commissions. He must pay all of his own expenses. During the year, he earned commissions of $28,000. His expenses were as follows: Automobile (operating costs) $3,000 Entertainment (meals) 1,000 Convention {related to his employment) 500 Donations 500 Telephone tong-distance charges (Personal use 80%) 1,000 The personal-use portion of his automobile expense is 20%.The UCC of his automobile at the end of the previous year was $5,000. 2. He made the following capital transactions: Gain (IO55) Shares of public corporation A $10,000 Shares of public corporation B (18,000) Shares of Canadian-controlled private corporation C (6,000) (a small business corporation) 3. In 2019, Perry acquired the following two residential rentai properties. map/J man/1 Land $10,000 $15,000 Building 70,000 60,000 Maximum capital cost allowance was claimed in 2019. In 2020, the city expropriated property Y for $77,000 (land $17,000, building $60,000). Perry was pleased because property Y was vacant forr part of the year after a tenant vacated unexpectedly. In 2020, net rental income from both properties (after ail expenses but before capital cost allowance) was $1,000. 4. Perry's other income and expenses are as follows: Income: Taxable dividendsCanadian public corporations $2,000 Interest on foreign bonds (net of15% withholding tax) 1,700 Expenses: interest on a loan used to acquire the foreign bonds 1300 Investment counsel fee 800 5. During the year, Perry made a contribution of 1,000 to a registered pension plan, which was matched by his employer. In addition, he contributed $2,000 to his RRSP. Required: A Employment Income: Net Employment Income $ 0 Rental Income: Net rental income $ 0 Other Property Income: Net Property Income $ 0 B Capital Gains: Net taxable capital gains 69 0 C Other Deductions D Net income for Tax purposes 0Allowable Business Investment Loss (ABIL) Allowable capital losses - Corp B Automobile CCA Automobile Operating expenses Commission Income Contribution to RPP Convention Expense CPP enhanced contributions Dividends Donations Entertainment Expense Foreign interest Interest expense Investment counsel fees Net rents before CCA Property X CCA Recapture of CCA RRSP deduction Taxable capital gains - Corp A Taxable capital gains - Property Y Telephone Expense

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

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

Step: 2

blur-text-image

Step: 3

blur-text-image

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

Management Leading And Collaborating In A Competitive World

Authors: Thomas S Bateman, Scott A Snell, Robert Konopaske

15th International Edition

978-1265051303

Students also viewed these Accounting questions