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Homework answers / question archive / Profile Assignment  Year 2020 George Smart is a self employed salesman who has been very successful at his job in the past few years

Profile Assignment  Year 2020 George Smart is a self employed salesman who has been very successful at his job in the past few years

Accounting

Profile Assignment  Year 2020

George Smart is a self employed salesman who has been very successful at his job in the past few years.  Unfortunately, his family life has had some challenges.   

George and his wife Judy, adopted their grandson, Paul, after a tragic accident which left Paul without his parents.   Paul is blind, and also has major health problems.

Judy is not working at the present time, she cares for Paul, as well as her mother, Paula, who also lives with them.  Paula suffers from severe depression.  Paula’s family doctor has signed a letter stating that she is dependent on George and Judy, because of her mental impairment.   

George’s sister Susy, completed an alcohol rehabilitation program after being fired for drinking on the job.  She is also living with George and Judy while she is enrolled as a full time student at Humber College.   Susy pays for her own tuition but Susy wants to transfer any available education related amounts to George.   

Personal Information:

Mr George Smart

SIN                                                                  499 499  499

 

Commented [JC1]:

 

Date of Birth                                                June 25, 1966

 

Marital status:                                             Married

Canadian citizen                                          YES

Provide information to Elections Canada                           YES

Own foreign property of more than $100,000 Cdn           NO

Address:                                                      150 Humber College Blvd,  Toronto ON M1M1M1

Phone number                                           416-675-6612

 

Spouse Judy Smart

SIN                                                                 994 994 994

Date of Birth                                                Jan 18, 1969

Net Income                                                 T5  - Interest Income $5000

 

Child: Grandson Paul

SIN                                                                 527 000 517

Date of Birth:                                               Mar 22, 2015

Net income:                                                 NIL

 

 

Mother in law: Paula Small

SIN                                                                517-000-483

Date of birth:                                               Feb 10, 1940

Net Income:                                                $maximum OAS,   $3,000 CPP

 

 

Sister:  Susy Smart

SIN                                                                527-000-533

Date of Birth:                                               April 8, 1969

Net income:                                                 $9,500

Susy’s Tuition fees (T2202A)

Tuition fees paid for Humber College     $6,000

No of mths in school full time                  6

During the year,  Susy was arrested in Mexico, Judy had to spend five weeks in Mexico and $2,000 in legal fees to get her released from jail. 

George had to pay Nannies on Call $4500 for in home help to care for Paul while Judy was gone.

 

Self employment:             Smart Company,  year end December 31, 2020

Total Sales    (Cash and accrual)  Expenses:

Opening inventory         $15,000

Purchase                          $200,000

Direct labour                   $100,000

Closing inventory           $20,000

Office supplies               $12,500

Insurance                         $5,000

Life insurance                  $3,000

Rent                                 $20,000

Telephone                       $5,000

Bank chgs & Interest     $4,500

Eqiupment lease            $5,800

Professional fees            $6,000

Golf club dues                $2,800

Meals & Entertainment $9,500

 

Work space in his home

$500,000

Home office                                   

  650 sq feet 

Total Home                                    

3000 sq feet

Heat                                                 

$ 2,500

Electric                                            

$  1,000

Insurance                                        

$     500

Repairs                                            

$  2,000

Mortgage payments                     

$12,000 of which interest is $5,000

Property taxes                               

$  4,000

Water                                              

$     300 

 

Car expenses that George incurred during the year

Gas/oil                                                          $   6,000

Repairs                                                            $   1,300 License                                                            $      200

Insurance                                                     $   1,200

Cost of vehicle purchased on Mar 1        $45,000

Personal Km’s driven                                   12,000

Business Km’s driven                                   20,000

 

During the year George purchased a new computer and software that was used solely for business related purposes.  The computer cost $1,500 and the software programs cost $1,500

 

 

 

Charitable donations contributed during the year

Mothers against drunk drivers                 $  1,000

Canadian Cancer society                           $  2,000

 

George and Judy own a rental property – the income and expenses are as follows:

Address:  199 Happy Avenue, Toronto, ON M1P 1R6   Purchased in 2010 for $400,000.  No CCA has ever been claimed on this property.

Rental income received                              $ 19,000

Property taxes                                              $   5,000

Insurance                                                      $   1,850

Interest on mortgage                                  $   4,175

Principal mortgage pmts                            $   2,200

Repairs                                                          $   1,800

Maintenance contract                                $      900

 

George sold the following assets during the year:

 

Description                      Maple Leaf shares

Imperial Oil Shares

Antique Car        Painting

Number of units                           150        

              387        

   n/a                       n/a

Year of acquisition                       2012      

              2013      

2013                  2008

Date of disposition                       Feb 14 

              June 6 

Oct 1                     Aug 28

Proceeds of disposition              $38,000

              $9,500 

$72,000                $1,100

Adjusted cost base                      $27,500

             $12,150

$74,000             $450

Selling expenses                           $500      

              $450      

n/a                      n/a

 

At the beginning of the year, George had a net capital loss carryforward of $10,500 from the sale of shares in 2014.

 

RRSP

George made a spousal contribution to Judy’s RRSP during the year,  of $5,000,  George’s RRSP contribution limit for the current year, is $12,500.  He has undeducted RRSP contributions carried forward of $1,000. Judy’s contribution limit is $3,500.

 

 

 

 

T5 for George and Judy jointly

Issuer                                                            

CIBC                    Power Corporation

Actual amount of eligible dividends         

   nil                    $    1,000

Taxable amount of eligible dividends      

   nil                    $    1,380

Interest                         

 

Medical expenses:

                   

$ 575                        nil

 

Date                    Individual

Company

Type of expense

Amount

June 5                GEORGE

Dr Jones

dental expense 

$   ,500

July 6                  JUDY      

Shoppers Drug Perscriptions       

$   ,300

Aug 12                PAUL      

Dr Jones             dental expense 

$ 1,000

Sept 10               GEORGE

Dr Sanders        Pshyio                  

$    900

Oct 10                SUSY      

Dr Jones             dental expense 

$    300

Dec 12                PAULA 

Shoppers           New wheelchair

$ 2,500

George paid $800 for the care and feeding of Paul’s seeing eye dog, Buster, during the year.

 

                                     

Please print in PDF format the following:

T1 jacket for George and Judy Smart

T1 summary for each

T776 Rental schedule

T2125 Business Schedule

 

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