College of Accounting & Management Sciences
ACCT 3200 B
Taxation — Week 2 Practice Case Natural Meats Inc. — Solution
Assessment Opportunity #2
The candidate analyzes the major personal tax issues.
The candidate demonstrates competence in Taxation.
CPA Map Competencies:
6.1.5 Analyzes the tax consequences or planning opportunities for complex corpo
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College of Accounting & Management Sciences
ACCT 3200 B
Taxation — Week 2 Practice Case Natural Meats Inc. — Solution
Assessment Opportunity #2
The candidate analyzes the major personal tax issues.
The candidate demonstrates competence in Taxation. |
CPA Map Competencies:
6.1.5 Analyzes the tax consequences or planning opportunities for complex corporate
transactions (Elective – Level B)
6.2.1 Assesses general tax issues for an individual (Elective – Level A)
Preliminary adjustments to Andrea’s 20X8 and 20X7 taxable income
Vehicle benefits
A taxable benefit must be assessed to Andrea for personal usage of the vehicle. She
has stated that approximately 1,000 km per month are business related. Any remainder
would be attributed to personal usage of the vehicle. As a result, a standby charge and
operating cost benefit should be included in her income as calculated in Exhibit I.
Shareholder appropriation (cash diverted from business account to personal bank
account)
Andrea receives catering cheques in her own name and deposits them into her personal
bank account. It does not appear that Andrea later transfers these funds to NMI. This
situation results in a shareholder appropriation (S 15(1)) in the year that the money is
received. The amounts that were deposited must be added to Andrea’s income.
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