Assignment Problems Solutions to Assignment Problems (APs) are available to instructors only. AP 12-1 (Corporate Taxable Income) The income statement that has been prepared by Margo Ltd's accountant for the year ending December 31,2021 , is as follows: Notes and Other Information: 1. The calculation of cost of goods sold was based on an opening inventory of $225,000 and a closing inventory of $198,600. In addition, the closing inventory was reduced by $15,000 for a reserve for future declines in value. This is the first year the company has used an inventory reserve. 2. Property taxes include $1,200 for tax paid on vacant land. The company has held this land for five years in anticipation of relocating its head office. 3. As the result of the purchase of a business on January 15, 2021, Margo Ltd. recognized $34,000 in goodwill. As of December 31, 2021, this goodwill was found to be impaired and a goodwill impairment loss of $1,700 was recorded. 4. The maximum CCA for the current year is $79,785. This includes the appropriate write-off of the goodwill described in Item 3. 5. The legal fees are made up of $1,200 paid to appeal an income tax assessment and $1,020 paid for general corporate matters. 6. The company bases its accounting bad debt expense on the amounts acceptable for income tax purposes. 7. This is the first year that the company has deducted a provision for estimated warranties. 8. The main purpose of the social club is to provide dining and recreational facilities. 9. The gain on the sale of investments involved shares held for investment purposes with a cost of $21,000. The shares were sold for $30,500. 10. The gross foreign interest income of $1,800 was received net of $270 paid in respect of foreign income or profits tax. The company will claim this amount as a foreign tax credit rather than a foreign tax expense. Required: Determine the minimum net income for ITA purposes and taxable income of Margo Ltd. for the year ending December 31, 2021