AP 6-1 (Reserves) Olivia Smith carries on a landscaping business as a sole proprietor. The business began opera- tions on January 2, 2021, and has a December 31 year end. The 2021 and 2022 results for the business can be described as follows: 2021 During its first year, the business had sales of delivered merchandise and services totalling $185,000. Of this total, $65,000 are shown as accounts receivable on December 31, 2021. Olivia anticipates that $5,000 of the receivables are doubtful of collection. In addition to these sales of delivered merchandise and services, she received $23,000 in advances for merchandise to be delivered in 2022. Olivia purchased a large supply of landscaping materials from the trustee of a bankrupt landscaping business at a very good price. Since she is unlikely to use them in the next few years, she has arranged to sell these materials for $50,000. The sale takes place in September 2021. These materials have a cost of $40,000, resulting in a total gross profit of $10,000. Because of the size of this sale, she has agreed to accept a down payment of $30,000, followed by two annual instalments of $10,000. The instalments are due on December 31, 2022, and December 31, 2023. 2022 During 2022, $5,500 of accounts receivable were determined to be bad and were written off. All of the merchandise for which advances had been received was delivered and the $10,000 instalment on the 2021 sale of landscaping materials was received. Sales of delivered merchandise and services totalled $240,000. Of this total, $50,000 are shown as accounts receivables at December 31, 2021. Olivia anticipates that $3,500 of this amount will be doubtful of collection. In addition to the 2022 sales of delivered merchandise and services, she receives $13,400 in advances for merchandise to be delivered in 2023 Required: How would the preceding information affect the calculation of Olivia Smith's busi- ness income for the 2021 and 2022 taxation years? Include the full details of your calculations, for each year During 2021, the various costs of operating his business, determined on an accrual basis, are as follows: Building operating costs Vehicle operating costs Vehicle lease payments Payments to assistants Miscellaneous office costs Meals with clients $22,000 7,200 5,775 24,000 4,500 3,500 Required: Calculate the minimum business income Carl would include in his 2021 personal income tax return. In preparing your solution, ignore GST/HST & PST considerations. AP 6-12 (Business Income with CO