Ms. Angie Fuesting established an RRSP in 2011. As of January 1, 2018, Angie had no unused
Question:
Ms. Angie Fuesting established an RRSP in 2011. As of January 1, 2018, Angie had no unused deduction room and no undedicated contributions. Her 2017 Earned Income was sufficient for her to make the maximum 2018 contribution of $26,230. However, as she acquired a new home during 2018, she made no contributions to her RRSP that year.
With the new home and furnishing purchases behind her and the receipt of a sizable inheritance from her mother's estate, she has sufficient funds to maximize her contribution in 2019. She would like you to advise her as to the maximum contribution that she can make in 2019.
The following information is available for the taxation year ending December 31, 2018:
Employment Income
Salary $225,000
CPP Withheld 2,594
EI Withheld 858
United Way Contributions Withheld 1,500
Stock Option Benefit 3,400
Deductible Employment Expenses 4,800
Other Information
Net Business Income (Note 1) 21,400
Interest Income 2,500
Note 1 The business income is from a mail order business that Angie runs out of her home.
—REQUIRED
A) Calculate Angie's 2018 Earned Income. You will lose marks for items included incorrectly.
B) Calculate the maximum 2019 RRSP contribution that Angie can make.
Fundamental financial accounting concepts
ISBN: 978-0078025365
8th edition
Authors: Thomas P. Edmonds, Frances M. Mcnair, Philip R. Olds, Edward