This assignment is based on Modules 1 through 5. It is worth 5%


Question Description:

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This assignment is based on Modules 1 through 5. It is worth 5% of your final course grade. You are not required to provide ITA references unless specifically asked in the question. General instructions If this is your first time using the Online Learning Environment, refer to the quick tutorials in the Support Centre. You will find general assignment FAQs in your Assignment /Quiz submission work area. Prepare your answers to these assignment questions in Word and save them as one Word document on your hard drive. For the recommended format and filename, see Submit Assignments in the Assignment submission area. If this assignment Word file requires you to paste Excel.xls sections, or other files, you are strongly advised to refer to How To/ Use Software/ Excel, Word, or both, to ensure you successfully submit your completed assignment. When your file is complete and you are ready to submit it for marking, click on Assignment Submission and select your assignment. For help, refer to the quick tutorial “Assignment submission & retrieval.” Follow these steps to ensure that your marker receives your assignment: Select the Grade Centre link. Select the exclamation mark (!). In the section “Your work,” select the file. If you can view the unmarked assignment, it is okay. If you are unable to view the assignment, contact your CGA affiliate office for help. For Excel data files, you must download and unzip the data files for the course. See the instructions in the course introduction, and click on the appropriate session data files link. For questions involving mathematical calculations, you must show your calculations to receive maximum marks. For questions with computer components, follow the given procedure. Adopt a consistent approach to rounding in your calculations. Here are some general guidelines: Round all currency numbers to two decimals. For $ million, you may omit decimals. For example, $18,824.68 × 542 = $10,202,976.56. You may round this to $10,202,977. If the unit is in thousands of dollars, calculate it as $18.82 (thousand) × 542 = $10,200.44 (thousand). If you are asked to state the result of the multiplication in $ million, you would respond $10.20 million. Round all other numbers to a minimum of four decimal places (unless otherwise directed in the question). For example, if a share is trading at a price per share of $27.25 and has earnings per share of $3.89, then the stock has a price/earnings ratio of $27.25 ÷ $3.89 = 7.0051 and an earnings/price ratio of $3.89 ÷ $27.25 = 0.1428 or 14.28%. When in doubt, err on the side of greater accuracy. Question 1 (20 marks) Trent Hudac is the Vice President for Pure Genius Inc., a public company that manufactures diapers and baby food. Today is March 29, 2015. You, a CGA, are asked to determine Trent’s net income for tax purposes under Division B. In addition to earning a salary of $185,600 in 2014, you are told that he has the following transactions in 2014: Cash dividends of $3,000 were received from investment in shares of a Canadian resident public corporation. Cash dividends in the amount of $17,000 were received from investment in shares in U.S. companies (net of $3,000 withholding tax, all figures in Canadian dollars). Pure Genius granted Trent a stock option in January 2014, which he exercised in June 2014. The following information relates to the stock option: Number of shares purchased 3,000 Fair market value — grant date $1.50 Option price $1.80 Fair market value — exercise date $2.50 On January 1, 2012, Trent received a low-interest (3%) loan from his employer in the amount of $200,000. The loan is payable in four equal annual instalments commencing January 1, 2013. The money was used to purchase investment property to earn rental revenue. Trent paid both the 2013 and 2014 interest and instalments on the required due dates. Assume the prescribed rate of interest for 2014 is 5%. The following information relates to this rental property: Rental rev…

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