Question

Assignment Problem Three -1 (Bonus Arrangements,) Marques Ltd. is a Canadian public company with a taxation year that ends on November 30, Its shares are widely held. However, its senior management is made up of the four Marques rothers. As the year ending November 30, 2018 has been very successful for the Company, it is declaring a bonus to each of the four senior executives. All of the November 29, 2018. The details of these arrangements are as follows Cheeco Marques Cheeco is the CEO of the Company. Because of his conservative lifestyle, he has little current need for funds. Given this, his bonus will be paid orn March 31, 2024, his expected retirement date. Zeppo Marques Zeppo is the Vice President of Finance of the Company. While he is not pressed for as long as possible. Given this, his bonus will be paid on January 1, 2019 bonuses are declared on for current income, he would like to defer the personal payment of tax arques Groucho is the Vice President of Human Resources of the Groucho M any. Unfortunately Groucho has been married and divorced six times, a fact Comp that may be related to his hiring criteria for fe constantly in need of funds to maintain his required support need, his bonus will be paid on December 1, 2018 male assoclates. As a consequence, he is payments. Based on this Marques Harpo, who is in charge of information technolo Harpo company, plans to leave the company in mid-2019. It has alway pursue a musical career and, to that end, early stages of that endeavour. Given this, his bonus will be pai 2019 for the e company in he will need funds to carry him through the on September 1, Required: For each of these brothers, indicate the taxation year in which the c deduct the bonus, as well as the taxation year in which the recipient will include im pany can it in his tax return

Answer 1

In case of cheeco marques :-

Taxation year in which company can deduct the bonus is year 2018 as it declare in this year only

Taxation year in which cheeco marques will include it in his return is year 2024. as he received in this year.

In case of Zeppo marques :-

Taxation year in which company can deduct the bonus is year 2018 as it declare in this year only

Taxation year in which Zeppo marques will include it in his return is year 2019. as he received in this year.

In case of Groucho marques :-

Taxation year in which company can deduct the bonus is year 2018 as it declare in this year only

Taxation year in which Groucho marques will include it in his return is year 2018. as he received in this year.

In case of Harpo marques :-

Taxation year in which company can deduct the bonus is year 2018 as it declare in this year only

Taxation year in which Harpo marques will include it in his return is year 2019. as he received in this year.

Assume financial Year use jan-dec for taxation.