Ahmad Riaz

100330070
ACCT 3320 (A10)
Assignment #2

Ch 3 – Question 1

Cheeco Marques – Company can deduct the bonus on Mar 31, 2026 and Cheeco will include
it in his tax return on Mar 31, 2026.

Zeppo Marques - Company can deduct the bonus on Nov 30, 2020 and Zeppo will include it
in his tax return on Nov 30, 2020.

Groucho Marques - Company can deduct the bonus on Dec 1, 2021 and Groucho will include
it in his tax return on Dec 1, 2021.

Harpo Marques - Company can deduct the bonus on Sep 1, 2021 and Harpo will include it in
his tax return on Nov 30, 2020.

Ch 3 – Question 3

Employment Usage
51% > 50%

a) Standby Charge
A . (0.0.2)(60,000)(12) = $14,400
14,000 / (1667 x 12) = 0.69986
14,000 x 0.69986 = $9,798

B . (0.0.2)(150,000)(12) = $36,000
36,000 / (1667 x 12) = 1.7996
36,000 x 1.7996 = $64,787

b) Operating Cost Benefit

A - (0.28)(65,000) = $18,200
9798 x 0.5 = $4,899
Total Taxable Benefit – 9798 + 4899 = $14,697
 B – (0.28)(65,000) = $18,200
64787 x .5 = $32,394
Total Taxable Benefit – 64787 + 18200 = $82,987

He should Choose option A as it is lesser amount than option B

Ch 3 – Question 9

When When Option Exercised When Shares Sold

Option
Granted
Case 1 - FMV of shares = $37.80 x 410 = $15,498 Ignore any capital gains
No Tax Option Price = $32 x 410 = $13,120 implications
Implication Taxable Benefit = $2,378
s Less : Division C Deduction = $1,189
Net Taxable Income = $1,189
Case 2 - FMV of shares = $37.80 x 410 = $15,498 Ignore any capital gains
No Tax Option Price = $32 x 410 = $13,120 implications
Implication Taxable Benefit = $2,378
s Less : Division C Deduction = None
Net Taxable Income = $2,378
Case 3 - Not Tax Implication FMV of shares = $37.80 x 410
No Tax = $15,498
Implication Option Price = $32 x 410 =
s $13,120
Taxable Benefit = $2,378
Less : Division C Deduction =
None
Net Taxable Income = $2,378
Case 4 - No Tax Implications FMV of shares = $37.80 x 410
No Tax = $15,498
Implication Option Price = $32 x 410 =
s $13,120
Taxable Benefit = $2,378
Less : Division C Deduction =
None
Net Taxable Income = $2,378
Ch 3 – Question 11

$26,900 - $422 - $10,500 = $15,978