A Canadian public company has Tax Payable of $62,000 in 2018, $95,000 in 2019, and $75,000 in 2020. The company would like to minimize its 2020 instalments. What would its instalments be?
A)One monthly payment of $5,167 per month, followed by eleven monthly payments of $8,167 per month.
B)Twelve payments of $5,167 per month.
C)Twelve payments of $6,250 per month.
D)Two monthly payments of $5,167 per month, followed by ten monthly payments of $8,467 per month.

Question

Quizplus · Accepted Answer

The instalments would be based on the lowest tax payable in the previous years, which is $62,000 in 2018. Dividing $62,000 by 12 months gives $5,167 per month. However, the correct monthly instalment is $6,250, which indicates a calculation based on an average or another method, not directly mentioned in the question but leading to choice C as the correct answer.

A Canadian Public Company Has Tax Payable of $62,000 in 2018