ABC Limited specializes in home renovation and interior design in the Toronto area. Most of the construction and finish carpentry work is subcontracted to self-employed contractors. The following information relates to the corporation's net income for the year ended December 31. Sales revenue $ 3,650,000 Direct contracting expenses $ 2,945,000 Gross profit $ 705,000 General and administrative expenses: Salary to President of ABC Ltd. $ 105,000 Salary to spouse (accounting) (Note 1) $ 33,000 Meals and entertainment (Note a) $ 12,000 Advertising expenses (Note b) $ 4,500 Travelling expense (Note c) $ 11,000 Interest and bank charges (Note d) $ 12,500 Amortization (Note e) $ 7,600 Office expenses $ 8,800 Total expenses $ 194,400 Net operating profit $ 510,600 Other: Gain on sale of real estate (Note f) $ 33,000 Sale of design contracts (Note g) $ 16,000 Net income: $ 559,600 There was one unrecorded receivable for a renovation project completed on December 31 for $12,000. Note a: meals and entertainment includes: Club dues $ 1,700 Promotional meals and season hockey tickets $ 10,300 Total $ 12,000 Note b: advertising expenses include: Charitable donations $ 2,500 Community promotion $ 475 Local advertising and mail outs $ 1,525 Total $ 4,500 Note c: Travelling includes both air travel and travel reimbursement to employees for business travel. The company's policy is to reimburse employees 59 cents per kilometer for the business use of their automobiles. The employees drove less than 5,000 kilometers. Note d: Interest and bank charges include: Interest expense - operations $ 3,750 Penalty interest for late filing prior year's corporate tax $ 6,600 Bank charges $ 2,150 Total $ 12,500 Note e: The company uses the straight-line method of amortization. The maximum capital cost allowance that may be claimed is: $8,800 Note f: During the year, the company purchased two homes. After the President redecorated, the corporation sold the homes for a profit. The corporation has sold six homes in the last two years using the same strategy. Note g: The sale of design contracts resulted from the President's wishes to downscale her involvement in commercial design. The gain on sale is net of all costs and expenses and is considered to be a capital gain. Note h: The salary to the President's spouse is considered taxable because he spends most of his working day administering her business. Given the income statement above, the controller of ABC Ltd. has asked you to make the necessary adjustments to calculate the company's income from a business for tax purposes (Division business B income) Consider the details in note b on advertising expenses and note g on the design contract. What adjustments need to be made for tax purposes?