Aaron Hill is the sole shareholder of Hill Enterprises Ltd., a small retail shop selling locally made arts and crafts. The shop has been in operation for several years and has a calendar fiscal year.

Aaron provides you with the Income Statement for the corporation for December 31, 2020.

Notes to the financial statements

1. Hill Enterprises Ltd. is a small business corporation operated by the sole shareholder, Aaron Hill.
2. Accounting and legal includes legal fees related to Aaron's dispute in regards to a personal car accident in the amount of $1,960.
3. Advertising and promotion includes 'Meals and Entertainment' costs in the amount of $4,210.

4. Information for Capital Cost Allowance (CCA) purposesthe CCA for 2020 was as follows:

Class 8 (Office & General Equipment): $9,060

Class 10 (Automotive Equipment): $7,200

5. The company has set up an allowance for doubtful accounts based on a review of the Accounts Receivable at December 31 of the current year. This is a procedure that the proprietorship follows every year.
6. Insurance includes life insurance premiums for Aaron Hill in the amount of $2,600. This life insurance policy is required as collateral for the business bank loan.
7. Office expenses include the $5,600 purchase of laptop computers on January 15, 2020.
8. Wages and benefits includes the club dues/membership fees paid to the Royal Oak Club in the amount of $5,920. The club dues are paid for the five managers who take clients to the Royal Oak Club on a regular basis for business purposes.

Required

Calculate the net business income for Hill Enterprises Ltd. for 2020.

Hill Enterprises Ltd. Income Statement For the year ended December 31, 2020 Income $ 640,000 A 52,000 24,200 Sales Cost of sales Opening inventory Purchases Closing inventory Total Cost of Goods Sold Gross profit 76,200 64,000 12,200 627,800 3,600 Expenses Accounting and legal expenses (Note 2) Advertising and promotion expenses (Note 3) Depreciation expense (Note 4) Automobile expenses Bad debts expense (Note 5) Insurance expense (Note 6) Interest expense Office expenses (Note 7) Rent expense Wages and benefits expenses (Note 8) 4,800 25,600 7,000 3,400 7,800 18,400 10,500 34,000 102,000 Total expenses 217,100 Net income $ 410,700 Start with current pre-tax accounting income List item Amount ITA section or rationale Add back: Deduct: Total net business income Hill Enterprises Ltd. Income Statement For the year ended December 31, 2020 Income $ 640,000 A 52,000 24,200 Sales Cost of sales Opening inventory Purchases Closing inventory Total Cost of Goods Sold Gross profit 76,200 64,000 12,200 627,800 3,600 Expenses Accounting and legal expenses (Note 2) Advertising and promotion expenses (Note 3) Depreciation expense (Note 4) Automobile expenses Bad debts expense (Note 5) Insurance expense (Note 6) Interest expense Office expenses (Note 7) Rent expense Wages and benefits expenses (Note 8) 4,800 25,600 7,000 3,400 7,800 18,400 10,500 34,000 102,000 Total expenses 217,100 Net income $ 410,700 Start with current pre-tax accounting income List item Amount ITA section or rationale Add back: Deduct: Total net business income