Min-ju Yang is employed as a salesperson and earns both a salary and commission income.In 2020, Min-ju's commissions totaled $5,500.Min-ju is required to pay for numerous employment expenses each year which are identified on the annual T2200.Min-ju paid $6,200 for advertising and promotion during the year.Min-ju uses a personal vehicle for work purposes, and in 2020, the total capital cost allowance for the car was $12,000, and $320 of interest was paid per month on a loan for the car.Min-ju drove the car a total of 20,000 kilometres in 2020.8,000 of these were for work purposes.How much is Min-ju's total salesperson deduction for 2020?
A)$0
B)$11,760
C)$12,460
D)$21,850

Question

Quizplus · Accepted Answer

Min-ju's total salesperson deduction includes the commission income of $5,500 and the employment expenses that are deductible. The employment expenses include $6,200 for advertising and promotion. The car expenses are calculated based on the work-related use percentage (8,000 km for work out of 20,000 km total, or 40%). The capital cost allowance and interest on the car loan are also deductible based on this percentage. Therefore, the deductible car expenses are 40% of $12,000 (capital cost allowance) plus 40% of $3,840 (total annual interest, $320 per month for 12 months), which equals $4,800 + $1,536 = $6,336. Adding this to the advertising and promotion expenses gives a total deduction of $6,200 + $6,336 = $12,536. However, since the commission income is $5,500, and the question seems to imply that only expenses up to the commission income are deductible, the correct answer would be based on the calculation error in interpreting the question's requirements for deductions. The closest answer reflecting a calculation based on the provided information is $11,760, acknowledging a potential misunderstanding in the calculation process.

Min-Ju Yang Is Employed as a Salesperson and Earns Both