A condensed income statement for ACB Enterprises Limited for its

2022 year ended December 31, shows the following:

ACB Enterprises Limited

Condensed Income Statement

For the Year Ended December 31, 2022

Sales	$3,832,500
Cost of sales (see (1) below)	$(3,439,000)
Gross profit	$393,500
General and administrative expense	$(779,500)
Loss from operations	$(386,000)
Other income (deductions)	$754,000
Net income before income taxes	$368,000
Income taxes	$(160,000)
Net income after income taxes	$208,000

The information in the following notes has already been reflected in the above-condensed income statement.

An analysis of the cost of sales account revealed that the inventory values were as follows:

December 31, 2021	$1,680,000
December 31, 2022	$1,020,000

The inventory is valued at average cost. The cost of the closing inventory on December 31, 2022 exceeds fair market value by $10,000. This write-down was not recorded in the financial statements since it was not considered to be material.

Contribution to a registered pension plan on April 14, 2023 for executives, allocated to 2022 expenses by the corporation's accountant were as follows:

	Registered Pension Plan	Employment Compensation
President	$17,000	$175,000
Vice President	$11,000	$140,000
Accountant	$9,000	$90,000

The pension plan is a defined contribution (money purchase) plan. The registered plan contribution above was matched by equal contributions made by the employees.

The company paid the following amounts to Sun Insurance Limited during the year:

Group term life insurance for employees, which was included in the $200,000 term life insurance policy on the president, which was included in the "Insurance" expense account ($500 x 12 months)

$6000

ACB Enterprises Limited is the beneficiary of the insurance policy on the president. The life insurance policy on the president was assigned to the bank as collateral for a $500,000 loan from January 1 through May 30, 2022. The loan was repaid on June 1, 2022. The premiums paid equally the net cost of pure insurance related to this policy.

The following selected information was taken from the "Promotions" account:

Advertising in an exclusive foreign magazine not distributed in Canada	$30,000
Advertising in Canadian magazine distributed only in Europe:
Advertising to appear in December 2022	$20,000
Advertising to appear in January 2023	$3,000
Political contributions	$2,500
Baseball tickets were given to customers as Christmas gifts	$2,800
Staff Christmas party	$12,000
Total	$70,300

The company's "Legal expense" account included the following legal fees:

Costs incurred in connection with negotiations for a line of credit at the bank	$5,000
Cost of sale of capital assets during the year	$2,050
	$7,050

Other expenses deducted in the financial accounting computation of income include:

Amortization of capital assets	$45,000
Appraisal to determine the value of capital property prior to disposition	$900
Damages under a breach of contract suit initiated by a supplier	$3,550
Total	$49,450

You have correctly determined that ACB Enterprises Limited is entitled to $110,000 capital cost allowance claim in 2022 and you have verified that this is correct.

Required:

1. Based on the foregoing information, compute the income from the business for tax purposes for ACB Enterprises Limited for its 2022 fiscal year. Show all calculations whether or not they seem relevant to the final answer.
2. Comment, briefly, on all items omitted from the calculation.