Your client has approached you, a CPA, on March 1, 2023. He would you to estimate the

Fantastic news! We've Found the answer you've been seeking!

Question:

Your client has approached you, a CPA, on March 1, 2023. He would you to estimate the federal income tax for the taxation year ended December 31, 2022 for the corporation that he owns. It is a Canadian-controlled private corporation located in Ontario. Your client has prepared the income statement of the company for the fiscal year ended December 31, 2022: Sales 1,580,000 Cost of goods sold (956,000) Gross profit 624,000 Expenses Salaries and wages 112,000 General and administrative 36,800 Depreciation and amortization 46,800 Advertising 21,000 Other 26,000 (242,600) 381,400 Other Income Dividend from Canadian private corporation 20,600 Interest from government bonds 18,800 Capital gain on the sale of property 36,000 75,400 Net income before tax 456,800 You also noted the following: Other expense contains meals and entertainment expense of $9,500; Other expense contains donation of $12,000 to registered charity; Capital cost allowance for 2022 was $39,500; There is no other associate corporations to share the small business limit; and Unused non-capital loss of $5,500 from prior year. Required: For the taxation year ended December 31, 2022, calculate the following

a) Net income for tax purposes

b) Taxable income