QUESTION #2(10 MARKS)

Jerry Singh is employed by X Ltd., a Canadian-controlled private corporation. The following information

Pertains to her income over the last 2 years.

2021............................2020

Salary before benefits.......................................................................$230,000........................$214,000

Employee stock option benefits......................................................... 14,000........................ 8,000

Employment interest benefit.............................................................. 10,000........................ 12,000

Registered Pension plan contributions.............................................. (5,500).......................... (5,200)

Other deductible employment expenses.............................................(5,000).......................... (4,000)

Interest income........................................................................................ 4,000..............................3,000

Taxable capital gains................................................................................ 6,500..............................4,000

Business income....................................................................................... 30,000............................20,000

Royalty income from books..................................................................... 3,500............................. 2,500

Rental loss before capital cost allowance...............................................(6,000)..........................(11,000

Dividends from IBM stocks..........................................................................1,000...........................1,2000

Jerry participates in a defined registered pension plan. His pension adjustment for 2020 and 2021 are as follows

2020....................................................$9,000

2021.....................................................$9,500

Required:-

a. Calculate Jerry's allowable RRSP Contributions for 2021.(6marks).

b. Explain what is meant by deduction and contribution limit for RRSP.(4 marks)