Jack is an ABC, a Canadian$-$controlled private corporation $($CCPC$)$ employee. Jack provided the following to you regarding all his financial and non$-$financial transactions during $2023.$ He received the following in $2023$:

Gross salary $$60,000$

Payroll deductions:

Income taxes $$12,000$

CPP premium $2,307$

EI premium $840$

RPP employee contributions $4,200$

Union Dues $375$

Group accident disability insurance

Use of employer car $200$

$1,900$

$(21,822)$

Net pay $$38,178$

$2.$ Director's fees of $$2,400$ received from being on the board of XYZ$,$ a public corporation controlled by ABC $(100\%$ of XYZ voting shares owned by ABC$).$

$3.$ For his good performance, he was awarded a $$20,000$ bonus of a total bonus he received $$12,000$ on Dec $25,2023,$ and the remainder is to be paid next year.

$4.$ A birthday gift of a new iPhone was given to Jack for his personal use. ABC corporate policy was to deduct such gifts; the cost of the phone was $$700,$ not including $5\%$ GST

$5.$ Jack and his spouse rented the company's condo in Colorado for two weeks during the winter ski season. They had to pay ABC $$500$ per week for accommodations that would otherwise have cost them $$1,400$ for the entire stay. Jack was not involved in any business activities during this trip.

$6.$ Jacks spouse accompanied him on a business trip to Cuba, paid for by his employer. The main purpose of the trip was for Jack to work with a customer. His spouse performed no business function during the trip. They did not extend their trip to include a vacation. ABC paid Jacks expenditures of $$5,000,$ which were reasonable in relation to the business function. The portion of the travelling expenses related to Jacks spouse was also paid by ABC and amounted to $$1,000.$

$7.$ In $2023,$ ABC paid for Jack to have his income $2023$ tax return prepared by the companys accountants at $$375.$ ABC also made in$-$house staff available to Jack with retirement planning advice valued at $$800.$

$8.$ During the year, ABC provided its employees with free meals in the company cafeteria. Jacks meals cost the company $$1,100$ to prepare and serve. The meals would have cost Jack $$1,900$ in a similar commercial restaurant.

$9.$ ABC provided Jack with a car for the entire year, which they bought in $2018.$

The capital cost of the car $$38,529$

Capital cost allowance claimed by the company $5,085$

Operating costs paid by the company $4,300$

Kilometres were driven in $2023$ as per Jacks log:

Business use $12,400$

Personal use $7,600$

$10.$ In May $2023,$ Jack was in a production accident and could not work for four weeks. During this period, he received disability payments totaling $$11,538$ from the insurance company. Disability insurance premiums are shared equally by the employer and employee. The plan was started in $2018,$ and the annual premiums have not been changed.

$11.$ Jack's home required major renovations due to a fire. While the property was not inhabitable, ABC provided Jack with a company$-$owned apartment. Jack stayed in the apartment for two months, paying $$300$ per month, while rent in this building for a similar unit was $$1,000$ per month.

$12.$ ABC provides Jack a one$-$year membership in the Province of Alberta golf club. The cost of this annual membership was $$1,300,$ paid by ACB.

$13.$ On Feb $15,2023,$ Jack receives options to buy $200$ shares of ABC. Common shares at a price $($exercise price$)$ of $$23.$ The market price was $$21.$ Jack exercised the option on August $12,2023,$ when the price was $$28$ per share. Jack plans to hold those shares for a few years

$14.$ On Jan $1,2023,$ ABC provided Jack with a $$50,000$ loan at an annual interest rate of $5\mathrm{.}5\%.$ The prescribed rate was $5\%$ for all quarters in $2023.$

$15.$ The company installed recreational facilities at its head office. All employees are permitted to use these facilities free of charge. The equivalent value for similar facilities at a private club would be $$1,100$ per year.

$16.$ Jack paid $$1,800$ in annual dues to a professional accounting association.

$17.$ Other disbursements made by Jack include the following:

$-$ Advanced accounting course tuition fees $$1,200$

$-$ Music history course tuition fees $($U of A$)600$

$-$ Payments of premiums on life insurance $2,400$

required by his Bank $($to cover his mortgage$)$

Required:

Calculate Jacks net employment income for $2023.$ Briefly provide reasons for any items not included in your calculations. Also, the calculation $($if needed$)$ for amounts is included in your answer.

I do recommend you to use the example I posted on Meskanas as a guide; also, it is NOT wrong to use the example on employment as a template $($simply use the template by removing my numbers and notes and inputting your numbers

Answer rating: 100% (QA)

Answer To calculate Jacks net employment income for 2023 we need to consider all the income and deductions provided in the information Lets break it d... View the full answer