Ava Miller has just completed the second year of operating her veterinary clinic. You have been retained by Ava for tax assistance and advice. At a recent meeting, you gathered information on her practice, which is presented below. For the year ended December 31, 2020, the clinic showed a profit of $149,700, as follows: Professional service Gross profit from surgical instrument sales Administration and other expenses Interest income Net income $388,400 33,900 $422,300 (276,200) 146,100 3,600 $149,700 Included in the above is depreciation/amortization expense of $27,800 on fixed assets and amortization of development costs of $5,300. Additional information for 2020 is outlined below. 1. On February 28, Ava purchased a competitor's business and merged it with her own. The following assets were acquired: Truck Equipment $21,800 60,500 2. 3. During the year, Ava designed and patented a new surgical instrument. On July 1, a legal fee of $4,800 was paid for the patent (life of 20 years) registration; this amount is included in administration expenses. In October, $19,400 was spent on consultants to research metal alloys, and this cost is being amortized as development costs in the financial statement. Professional services revenue includes the value of unbilled services compiled from a work-in-progress file. At December 31, unbilled services amounted to $19,400, compared with $2,500 at the same time last year. In 2019, Ava had made an election under section 34 of the Income Tax Act to exclude work in progress from income.