On September 1, 2020 you started work as a investment dealer at Top Corp. Prior to starting this job you were a commerce student at Ontario Tech University.

Top Corp. requires you to use your own car and pay expenses related to earning commission income. You purchase a car on September 1, for $21,000 (HST included). Top Corp. lends you $21,000 for the car, on the condition that you repay $7,000 a year, without interest for the next three years. Payments are due on December 31. The prescribed rate from September 1 to December 31, 2020 was 7%. The total amount you paid for gas and operating costs for the car was $1,600. The amount of capital cost allowance on the car relating strictly to employment income is $2,000. The total kilometers you drove from September 1 to December 31, 2020 is 12,500 of which 5,000 are personal kilometers.

Your net pay for the year was $16,520. Your T4 slip indicated:

Gross Salary                                                   4,000

Commissions                                                18,000

Bonus                                                                 300

Employment Insurance Premiums              ( 356)             

Canada Pension Plan Contributions           ( 944)

Charitable Donations                                     ( 280)

Income Tax Deducted                                 (4,200)

To earn commission income you paid the following:

Meals and entertainment                               2,300

Client promotional material                           1,500

Top Corp. paid the airfare and accomodation for you and your partner to attend a conference in New York City. The trip cost Top Corp. $800 for each of you (a total of $1,600). Top Corp. also paid the $400 premium for group life insurance.

Required: Calculate Net Employment Income. Show all calculations.

Answer rating: 100% (QA)

employment total kilometers in 12500 5000 12500 06 or 60 Net Employment Income 1652... View the full answer