Accounting

Yuen Li was terminated from his employment with Exit Ltd. in July 2020. In November, he began work as a commission salesperson for Kolex Ltd., a Canadian public corporation. Yuen has asked you to help him prepare his 2020 tax return. Information regarding his employment for 2020 is outlined below.

1. Yuen’s employment with Exit was terminated on July 31,. His salary to that date was $74,600. Besides income tax, Exit had deducted the following amounts from his salary:

Registered pension plan

$5,300

EI and CPP contributions

3,609

Group sickness and accident insurance plan premium

800

Exit also contributed $5,300 to an RPP and $800 to a group sickness and accident insurance plan on Yuen’s behalf. Yuen took a medical stress leave from January 10 to March 15. His salary was not paid during the leave. However, he received $6,100 for loss of earnings from the group sickness and accident insurance plan. In previous years, Yuen had paid a total of $4,000 in premiums to the plan.

2. On July 31, Yuen returned the company car to Exit, which had been available for his personal use. The car had an original cost of $40,500 and a book value of $24,000. Yuen had driven the car 20,000 km in 2020, of which 9,200 km was for employment purposes. Exit paid the operating expenses of $2,900.

3. When his employment was terminated, Yuen paid a lawyer $1,100 to settle compensation issues. As a result, he received additional holiday pay of $1,300 and a retiring allowance of $8,000 for his 10 years of service.

4. Yuen collected employment insurance of $5,400 before starting his employment with Kolex on November 1.

5. Besides a base salary of $1,300 per month, Yuen receives commissions on sales. His commission is 4% of sales. His first sales were made in late December and totalled $150,000. The related commission was received on January 15, 2021. On December 1, 2020, Kolex paid Yuen $1,500 as an advance against commissions.

6. Kolex certified that Yuen was required to pay his own car and other expenses. On November 1, he leased a car at $1,300 per month (including 13% sales tax). Operating expenses for November and December were $1,200 in total. The car was used 70% of the time for employment purposes.

7. In December, Yuen sold 5,300 shares of Kolex Ltd. at $10 per share. He had acquired them in November under a stock-option plan at $6. At the time of acquisition, the shares were valued at $8 per share. When the option was granted, the shares were valued at $6 per share.

8. Yuen incurred the following additional expenses:

Entertainment—meals and beverages

$900

Promotion—gift calendars for customers

200

Purchase of a cellular phone

800

Required:

Determine Yuen’s net income from employment for the 2020.

If answered within 45mins,it would be appreciable!!

Question

Accounting

Yuen Li was terminated from his employment with Exit Ltd. in July 2020. In November, he began work as a commission salesperson for Kolex Ltd., a Canadian public corporation. Yuen has asked you to help him prepare his 2020 tax return. Information regarding his employment for 2020 is outlined below.

1. Yuen’s employment with Exit was terminated on July 31,. His salary to that date was $74,600. Besides income tax, Exit had deducted the following amounts from his salary:

Registered pension plan	$5,300
EI and CPP contributions	3,609
Group sickness and accident insurance plan premium	800

Exit also contributed $5,300 to an RPP and $800 to a group sickness and accident insurance plan on Yuen’s behalf. Yuen took a medical stress leave from January 10 to March 15. His salary was not paid during the leave. However, he received $6,100 for loss of earnings from the group sickness and accident insurance plan. In previous years, Yuen had paid a total of $4,000 in premiums to the plan.

2. On July 31, Yuen returned the company car to Exit, which had been available for his personal use. The car had an original cost of $40,500 and a book value of $24,000. Yuen had driven the car 20,000 km in 2020, of which 9,200 km was for employment purposes. Exit paid the operating expenses of $2,900.

3. When his employment was terminated, Yuen paid a lawyer $1,100 to settle compensation issues. As a result, he received additional holiday pay of $1,300 and a retiring allowance of $8,000 for his 10 years of service.

4. Yuen collected employment insurance of $5,400 before starting his employment with Kolex on November 1.

5. Besides a base salary of $1,300 per month, Yuen receives commissions on sales. His commission is 4% of sales. His first sales were made in late December and totalled $150,000. The related commission was received on January 15, 2021. On December 1, 2020, Kolex paid Yuen $1,500 as an advance against commissions.

6. Kolex certified that Yuen was required to pay his own car and other expenses. On November 1, he leased a car at $1,300 per month (including 13% sales tax). Operating expenses for November and December were $1,200 in total. The car was used 70% of the time for employment purposes.

7. In December, Yuen sold 5,300 shares of Kolex Ltd. at $10 per share. He had acquired them in November under a stock-option plan at $6. At the time of acquisition, the shares were valued at $8 per share. When the option was granted, the shares were valued at $6 per share.

8. Yuen incurred the following additional expenses:

Entertainment—meals and beverages	$900
Promotion—gift calendars for customers	200
Purchase of a cellular phone	800

Required:

Determine Yuen’s net income from employment for the 2020.

If answered within 45mins,it would be appreciable!!

Accepted Answer

Statement of Net Income

Particulars
Amount

1) Salary: E Ltd
$74,600

2)Salary: K Ltd
$2,400…