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lol246733Lakehead University

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Philosophy1Science2Mechanical Engineering1Psychology1Accounting1Calculus1Chemistry2

Answer the questions below. When you are finished, submit this assignment to your teacher by the due date for full credit.

(3 points)

Score

1. How will the ice water mix with the salty water? Write your hypothesis below.

Answer:

Solution

Hypothesis Describing Mixing

Hypothesis Describing Temperature
(Will the top be warmer, cooler, or the same as the bottom?)

Solution 1
(freshwater)

 

Solution 2
(salty water)

 

Solution 3
(saturated water)

 

(6 points)

Score

2. Complete the data table. Sketch, use your computer to draw, or write a detailed description to describe how the ice melts into the different solutions. At each interval, record the temperature at the top and bottom of the glass.

Answer:

Solution 1
(freshwater)

0 minutes

5 minutes

10 minutes

30 minutes

 

Temperature (top of glass)

 

Temperature (bottom of glass)

 

Solution 2
(salty water)

0 minutes

5 minutes

10 minutes

30 minutes

 

Temperature (top of glass)

 

Temperature (bottom of glass)

 

Solution 3
(saturated water)

0 minutes

5 minutes

10 minutes

30 minutes

 

Temperature (top of glass)

 

Temperature (bottom of glass)

 

(3 points)

Score

 

3. Summarize your data. Describe how the ice melted into each solution, and compare the temperatures at the top and bottom of the glass.

Answer:

Solution

Mixing
(How did the colored, fresh, meltwater mix with the salty water?)

Temperature
(Was the top warmer or cooler, or was it the same as the bottom?)

Solution 1
(freshwater)

 

Solution 2
(salty water)

 

Solution 3
(saturated water)

 

(3 points)

Score

 

4. What does your experiment suggest about what happens when icebergs melt into the ocean? Based on your data, do you think the sea-surface temperatures are warmer or cooler due to the melting water? Make sure you explain how your experiment helps you answer this question.

Answer:

Answer:

It is March of 2020 and Karen and Stan have come to discuss their tax situation with you. They predict that Karen will not have to pay taxes for the 2019 year, which they believe will allow Stan to claim the non-refundable tax credit of ‘spouse credit.’ They have provided you with the following information, including the statements from their companies (see Exhibits I and II) which they have prepared themselves. Stan would also like to know the tax liability for his corporation, TKL Industries Ltd.

Facts

Stan and Karen and family

Stan and Karen have been married for ten years. They are both 39 years old, and they have three children under the age of five. The children attended daycare four mornings a week during 2019 while their parents worked. The total cost of the daycare for all three children was $2,300. Stan and Karen receive the monthly Canada child benefit for each child.

Stan

  • Stan is the sole shareholder and manager of TKL Industries Ltd., a local furniture manufacturing plant. He earns a pre-tax salary of $65,000 per year from TKL.
  • Stan received the following benefits from TKL in 2019:
    • Private health and dental care: $400
    • Life insurance: $500
    • $2,000 worth of products at cost
    • Registered pension plan (RPP) contributions: $3,000
      • (TKL also deducted $3,000 from Stan’s salary, which was Stan’s contribution to his RPP)
  • Stan contributed $2,000 to his RRSP for the 2019 taxation year (which is within his allowable limit).

Karen

  • Karen began part-time employment at Fitness Inc. in 2019, and earned a gross salary of $15,000. She did not have any employment income the previous year.
  • Karen received free use of the owner’s cottage for two weeks in May, which is typically rented out for $500 per week.
  • She began a small home-based proprietorship - “Karen’s Consulting” in 2018 - which generated $250 a month in pre-tax profits in 2019. The business operates from a 200 square foot room in the family’s 2000 square foot home, and is used exclusively for the business.
  • Karen did not file a tax return in 2018 since she didn’t owe any taxes.
  • Karen contributed $4,000 to her TFSA in 2019.

Exhibit I

TKL Industries Ltd.

The 2018 and 2019 annual financial statements for TKL (prepared by Stan) are as follows:

  2018 2019 Revenue from manufacturing and sales $2,000,000 $2,300,000 Dividend income from a taxable Canadian corporation 0 9,000 Investment interest income 2,000 6,000 Cost of goods sold 1,300,000 1,500,000 Gross profit $702,000 $815,000 Salaries and wages 300,000 350,000 Other administrative costs 250,000 300,000 Net income before interest and amortization $152,000 $165,000 Interest expense 10,000 10,000 Amortization 15,000 15,000 Net income after interest and amortization $127,000 $140,000

Other information

  1. Capital cost allowance calculations totaled $21,000 in 2018 and $24,000 in 2019.
  2. In 2019, a bonus was announced for Stan’s key employee, equal to a total of 1% of the 2019 annual ‘revenue from manufacturing and sales.’ The bonus has been structured to be distributed in two equal payments during 2020 on January 31st and November 30th, and has been included in the 2019 ‘salaries and wages.’
  3. Cost of goods sold and ‘other administrative costs’ adhere to the rules of the Income Tax Act.
  4. Interest expense is compliant with Section 20(1)(c) of the Income Tax Act.
  5. All of TKL’s ‘revenue from manufacturing and sales’ is from active business.
  6. The dividends were received from a public corporation, of which TKL owns less than 1% of the shares.
  7. TKL did not pay any dividends in 2019.

Exhibit II

Karen’s Consulting

The 2018 and 2019 annual financial statements for the business (prepared by Karen) are as follows:

  2018 2019 Revenue from manufacturing and sales $2,000,000 $2,300,000 Dividend income from a taxable Canadian corporation 0 9,000 Investment interest income 2,000 6,000 Cost of goods sold 1,300,000 1,500,000 Gross profit $702,000 $815,000

Note 1: All of the administrative expenses are compliant with the rules of the Income Tax Act.

Note 2: Work space expenses represent ten percent of Karen and Stan’s housing costs. The total housing costs include utilities of $2,400, mortgage interest of $8,400, property taxes of $2,500, and home insurance of $1,200. (The business has met the conditions necessary to allow for the deduction of home-based business expenses)

 

REQUIRED

(Use tax rules applicable for 2019)

  1. Prepare the calculations (in accordance with the statutory formula of S.3 of the Income Tax Act) to determine the taxable income for both Stan and Karen for 2019.
  2. Determine if Stan will be able to claim the non-refundable ‘spouse credit’ for the 2019 taxation year?
  3. Calculate the federal tax liability for TKL Industries Ltd. for 2019?
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