Jacquie Is the Sole Shareholder of Holdings Ltd

question 58

Multiple Choice

Jacquie is the sole shareholder of Holdings Ltd., which has a January 31 year end.On Jan- uary 1, 2011, Jacquie borrowed $10,000 on an interest-free basis from Holdings Ltd.She used $8,000 of this amount to acquire shares of Arrow Inc.and the remaining $2,000 for personal purposes.Arrow Inc.is a small Canadian controlled private company that manu- factures cross-bows.In March 2011, Arrow Inc.paid a non-eligible dividend of $1,100 to Jacquie.Jacquie repaid her $10,000 loan to Holdings Ltd.on June 30, 2011.Assume that these were her only transactions with Holdings Ltd.and the prescribed interest rate was 4 percent for the first quarter of 2011 and 3 percent for the second quarter.Which one of the following represents Jacquie's 2011 Taxable Income as a result of these transactions?

• A)$1,100.00.
• B)$1,375.00.
• C)$1,409.68.
• D)$1,548.42.

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Definitions:

λ

A symbol often used to represent the rate at which events occur in a Poisson process, typically events per unit time.

μ

A symbol commonly used in statistics and mathematics to represent the mean or average of a set of numbers.

Finite Population

A population set that contains a limited number of observations or elements.

Average Service Time

The mean time it takes to serve a customer or complete a process, a critical metric in evaluating the performance of a service system.