Assignment problem ten – 4

Assignment Problem Ten – 4 (RRSP Contributions)

Carla Goodman has been employed by Army Brake Productions (ABP), a Canadian controlled private corporation, since 2010. The following information pertains to her income over the past two years:




Salary before benefits

$120, 000

$120, 000

Employee Stock option benefit

8, 000

5, 000

Benefit On Interest Free Loan

6, 000

5, 000

Registered pension plan contributions

(4, 000)


(3, 000)

Deductible Employment Expenses

(4, 500)


(4, 000)

Interest income

(1, 800)

1, 600

Taxable Capital Gains

(15, 000)

10, 000

Business Income

34, 000

35, 000

Royalty Income

7, 000

5, 000

Rental Loss

(5, 000)

(10, 000)

Spousal Support payment

(15, 000)

(12, 000)

Non- Eligible Dividends on ABP stock


1, 000


$ 164, 200

$ 153, 600


The royalty income listed above is 2 percent of the sales of the “Handy Shopper,” a gadget Ms. Goodman invented three years ago. The business income listed above is earned from selling leather goods.

Ms. Goodman had no Earned Income for RRSP purposes prior to 2009. While in 2009 and 2010, she had sufficient Earned Income to enable her to deduct the maximum allowable RRSP contribution for 2010 and 2011, she made no RRSP contributions in either of these years.

Beginning in 2011, Ms. Goodman participates in ABP’s employee money purchase Registered Pension Plan. ABP contribute twice the amount contributed by an employee to the plan. Her Pension Adjustment for 2011 is $9,000.

Required:  Ignore all GST considerations.

A.      Calculate Ms. Goodman’s Earned Income for the purpose of determining her maximum 2012 RRSP contribution by listing the items and amounts that would be included in her Earned Income. List separately the items that are not included in the Earned Income calculation.

B.      Calculation Ms. Goodman’s maximum deductible RRSP contribution for 2012.



Assignment Problem Four – 4  (Tax Payable With Employment Income)

Extension of Assignment Problem Three- 10

For the past five years, Mr. Brooks had been employed as a financial analyst by a large Canadian public firm located in Winnipeg. During 2012, his basic gross salary amounts to $53, 000. In addition, he was awarded an $ 11, 000 bonus based on the performance of his division. Of the total bonus, $6, 500 was paid in 2012 and the remainder is to be paid on January 15, 2013.

During 2012, Mr. Brooks’ employer withheld the following amounts from his gross wages:

Federal Income Tax                                                                                                                                            $3,000

Employment Insurance Premiums                                                                                                                                    840

Canada Pension Plan Contributions                                                                                                                               2,307

Registered Pension Plan Contributions                                                                                                                        2,800

Donations to the United Way                                                                                                                                              480

Union Dues                                                                                                                                                                                 240

Payments For Personal Use of Company Car                                                                                                           1, 000

Other Information:

1.       Due to an airplane accident while flying back from Thunder Bay on business, Mr. Brooks was seriously injured and confined to a hospital for two full months during 2012. As his employer provides complete group disability insurance coverage, he received a total of $4, 200 in payment during this period. All of the premiums for this insurance plan are pain by the employer. The plan provides periodic benefits that compensate for lost employment income.

2.       Mr. Brooks is provided with a car that the company leases at a rate of $ 678 per month, including both GST and PST. The company pays for all of the operating costs of the car and these amounted to $3, 500 during 2012. Mr. Brooks drove the car a total of 35, 000 kilometers during 2012, 30,000 kilometers of which were carefully documented as employment related travel. While he was in the hospital (see item 1), his employer required that the car be returned to company premises.

3.       On January 15, 2011, Mr. Brooks received options to buy 200 shares of his employer’s common stock at a price of $23 per share. At this time, the shares were trading at $20 per share. Mr. Brook exercised these options on July 6, 2012, when the shares were trading at $20 per share. He does not plan to sell the shares for at least a year.

4.       In order to assist Mr. Brook in acquiring a new personal residence in Winnipeg, his employer granted him a five year, interest free loan of $125, 000. The loan qualifies as a home relocation loan. The loan was granted on October 1, 2012 and, at this point in time, the interest rate on open five year mortgages was 5 percent. Assume the relevant ITR 4301 rate was 2 percent on this date. Mr. Brooks purchase a house for $ 235, 000 on October 2, 2012. He has not owned a home during any of the preceding four years.

5.       Other disbursements made by Mr. Brooks include the following:

Advanced financial accounting course tuition fees                                                                       $1, 200

Music history course tuition fees

       (University of Manitoba one week intensive course)                                                                   600

Fees paid to financial planner                                                                                                                  500

Payment of premiums on life insurance                                                                                                642

Mr. Brooks’ employer reimbursed him for the tuition fees for the accounting course, but not the music course.

6.       Mr. Brook is a widower. His wife was killed in a car accident in 2009 that injured his 8 year old son, Harold, so badly that he qualifies for the disability tax credit. Mr. Brooks’ mother, Grace, lives with Mr. Brook and takes care of Harold. Harold has no Net Income for Tax Purposes. Grace is 67 years old and her Net Income for Tax Purposes is $7, 500. Grace refused to take any payments for caring for Harold as she received a large inheritance in the previous year. As a result, Mr. Brook did not pay any child care or attendant costs for Harold.

7.       Mr. Brooks paid the following eligible medical costs:

 For Himself                                                                                                                                          $7, 300                                

  For Harold                                                                                                                                           $4, 450

   For Grace                                                                                                                                                           $1, 265

   Total                                                                                                                                                  $13, 015

8.       Mr. Brook buys public transit passes for his son, his mother and himself. The monthly cost of these passes is $26 (son), $50 (mother), and $60 (himself). He purchased these passes for 10 months of the year.


Required: Calculate, for the 2012 taxation year, Mr. Brook’ maximum Taxable Income and fedral Tax Payable (Refund).



Calculate your paper price
Pages (550 words)
Approximate price: -

Why Work with Us

Top Quality and Well-Researched Papers

We always make sure that writers follow all your instructions precisely. You can choose your academic level: high school, college/university or professional, and we will assign a writer who has a respective degree.

Professional and Experienced Academic Writers

We have a team of professional writers with experience in academic and business writing. Many are native speakers and able to perform any task for which you need help.

Free Unlimited Revisions

If you think we missed something, send your order for a free revision. You have 10 days to submit the order for review after you have received the final document. You can do this yourself after logging into your personal account or by contacting our support.

Prompt Delivery and 100% Money-Back-Guarantee

All papers are always delivered on time. In case we need more time to master your paper, we may contact you regarding the deadline extension. In case you cannot provide us with more time, a 100% refund is guaranteed.

Original & Confidential

We use several writing tools checks to ensure that all documents you receive are free from plagiarism. Our editors carefully review all quotations in the text. We also promise maximum confidentiality in all of our services.

24/7 Customer Support

Our support agents are available 24 hours a day 7 days a week and committed to providing you with the best customer experience. Get in touch whenever you need any assistance.

Try it now!

Calculate the price of your order

Total price:

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

Our Services

No need to work on your paper at night. Sleep tight, we will cover your back. We offer all kinds of writing services.


Essay Writing Service

No matter what kind of academic paper you need and how urgent you need it, you are welcome to choose your academic level and the type of your paper at an affordable price. We take care of all your paper needs and give a 24/7 customer care support system.


Admission Essays & Business Writing Help

An admission essay is an essay or other written statement by a candidate, often a potential student enrolling in a college, university, or graduate school. You can be rest assurred that through our service we will write the best admission essay for you.


Editing Support

Our academic writers and editors make the necessary changes to your paper so that it is polished. We also format your document by correctly quoting the sources and creating reference lists in the formats APA, Harvard, MLA, Chicago / Turabian.


Revision Support

If you think your paper could be improved, you can request a review. In this case, your paper will be checked by the writer or assigned to an editor. You can use this option as many times as you see fit. This is free because we want you to be completely satisfied with the service offered.

Open chat
Need help?
for enquiries or orders talk to James here