Reference no: EM132846436
Question - 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.
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