Unit 2 Quiz
Question 1
Hansalle Inc. (HI) is an eligible small Canadian-controlled private corporation (CCPC) and its taxation year end is December 31. Taxes payable for HI in 2023 and
2024 totalled $12,000 and $10,000, respectively, and HI’s estimated taxes payable for 2025 equal $13,000.
Which one of the following is the minimum required amount for HI’s third quarterly instalment payment due for the 2025 taxation year?
a) $2,000
b) $2,333
c) $2,500
d) $3,250
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Option b) is correct. It was determined as follows:
The least of:
i) ¼ of estimated net tax owing for 2025 = $13, = $3,250
ii) ¼ of net tax owing for 2024 = $10, = $2,500
iii) First instalment: ¼ of net tax owing for 2023 = $12, = $3,000
Last three instalments: net tax owing for 2024 – first instalment = $10,000 – $3,000 = $7,000 remainder
⅓ of remainder = $7, = $2,333
This amount is less than one-fourth of current estimated tax payable of $3,250 ($13,) and one-fourth of the 2024 tax payable of $2,500 ($10,000 /
4).
Question 2
Today is August 1, 2024, and Jalbert Inc., a Canadian-controlled private corporation, received a notice of assessment (NOA) relating to its November 30, 2023,
year-end corporate income tax return. The NOA was dated July 27, 2024. The CFO of Jalbert disagrees with the Canada Revenue Agency’s (CRA’s) decision to
disallow certain expenses and wants to file a notice of objection (NOO).
Which one of the following dates is the last day on which Jalbert can file an NOO?
, a) October 25, 2024
b) October 30, 2024
c) November 30, 2024
d) May 31, 2025
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Option a) is correct. For corporations, an NOO must be filed within 90 days of the mailing date of the NOA.
Question 3
Graydon Snider, who is not self-employed, filed his 2023 personal income tax return on June 14, 2024. The correct amount of tax owing was $70,000 and
Graydon paid the amount in full upon filing. He was assessed a penalty last year for the late filing of his 2022 tax return. Assume the CRA prescribed rate is 5%.
How much interest and penalties could be assessed for Graydon’s 2023 tax return?
a) $5,028
b) $8,180
c) $8,400
d) $9,275
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Option d) is correct. The tax payment was due on April 30, 2024. The penalty calculation for a repeated offence is 10% of the tax that was unpaid at the
, filing deadline plus 2% for each complete month that the unpaid tax is owing (up to a maximum of 20 months). The filing deadline for individuals who are
not self-employed is April 30. April 30 to June 14 represents one complete month. Interest is calculated at 9% (4% + 5% prescribed rate) and will also
apply on unpaid amounts owing. Therefore, the interest and penalty is calculated as follows:
Repeated failure to file penalty: [10% + (2% × 1 month)] × $70,000 8,400
Interest: {($70,000 + 8,400) × [1 + (0.)]^45} – $78,400 875
Total interest and penalty $9,275
Question 4
The controller for Coastal Pools Inc. is calculating taxable income for the year ended 2024.
Applicable information is as follows:
Net income for tax purposes is $191,500.
During 2024, the company sold all of its shares in Breckenridge Ltd. for $27,000. The original cost of the shares was $17,300. No other capital transactions
occurred.
Charitable donations made to the Canadian Cancer Society totalled $525.
The company has a capital loss carryforward of $11,750 from the previous year when it sold shares in Harrison Ltd.
How much is taxable income for 2024?
a) $179,225
b) $185,100
c) $186,125
d) $186,650
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Question 1
Hansalle Inc. (HI) is an eligible small Canadian-controlled private corporation (CCPC) and its taxation year end is December 31. Taxes payable for HI in 2023 and
2024 totalled $12,000 and $10,000, respectively, and HI’s estimated taxes payable for 2025 equal $13,000.
Which one of the following is the minimum required amount for HI’s third quarterly instalment payment due for the 2025 taxation year?
a) $2,000
b) $2,333
c) $2,500
d) $3,250
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Option b) is correct. It was determined as follows:
The least of:
i) ¼ of estimated net tax owing for 2025 = $13, = $3,250
ii) ¼ of net tax owing for 2024 = $10, = $2,500
iii) First instalment: ¼ of net tax owing for 2023 = $12, = $3,000
Last three instalments: net tax owing for 2024 – first instalment = $10,000 – $3,000 = $7,000 remainder
⅓ of remainder = $7, = $2,333
This amount is less than one-fourth of current estimated tax payable of $3,250 ($13,) and one-fourth of the 2024 tax payable of $2,500 ($10,000 /
4).
Question 2
Today is August 1, 2024, and Jalbert Inc., a Canadian-controlled private corporation, received a notice of assessment (NOA) relating to its November 30, 2023,
year-end corporate income tax return. The NOA was dated July 27, 2024. The CFO of Jalbert disagrees with the Canada Revenue Agency’s (CRA’s) decision to
disallow certain expenses and wants to file a notice of objection (NOO).
Which one of the following dates is the last day on which Jalbert can file an NOO?
, a) October 25, 2024
b) October 30, 2024
c) November 30, 2024
d) May 31, 2025
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Option a) is correct. For corporations, an NOO must be filed within 90 days of the mailing date of the NOA.
Question 3
Graydon Snider, who is not self-employed, filed his 2023 personal income tax return on June 14, 2024. The correct amount of tax owing was $70,000 and
Graydon paid the amount in full upon filing. He was assessed a penalty last year for the late filing of his 2022 tax return. Assume the CRA prescribed rate is 5%.
How much interest and penalties could be assessed for Graydon’s 2023 tax return?
a) $5,028
b) $8,180
c) $8,400
d) $9,275
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Option d) is correct. The tax payment was due on April 30, 2024. The penalty calculation for a repeated offence is 10% of the tax that was unpaid at the
, filing deadline plus 2% for each complete month that the unpaid tax is owing (up to a maximum of 20 months). The filing deadline for individuals who are
not self-employed is April 30. April 30 to June 14 represents one complete month. Interest is calculated at 9% (4% + 5% prescribed rate) and will also
apply on unpaid amounts owing. Therefore, the interest and penalty is calculated as follows:
Repeated failure to file penalty: [10% + (2% × 1 month)] × $70,000 8,400
Interest: {($70,000 + 8,400) × [1 + (0.)]^45} – $78,400 875
Total interest and penalty $9,275
Question 4
The controller for Coastal Pools Inc. is calculating taxable income for the year ended 2024.
Applicable information is as follows:
Net income for tax purposes is $191,500.
During 2024, the company sold all of its shares in Breckenridge Ltd. for $27,000. The original cost of the shares was $17,300. No other capital transactions
occurred.
Charitable donations made to the Canadian Cancer Society totalled $525.
The company has a capital loss carryforward of $11,750 from the previous year when it sold shares in Harrison Ltd.
How much is taxable income for 2024?
a) $179,225
b) $185,100
c) $186,125
d) $186,650
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