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, 2022, 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 $3,600 related to the metal alloy research. Additional information for 2022 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. During the year, Ava designed and patented a new surgical instrument. On July 1, a legal fee of $4,800 was incurred in applying to the federal government for the patent registration (life of 20 years); this amount is included in administration expenses. In October, $18,200 was spent on consultants to research metal alloys, and this cost is being amortized over five years as development costs in the financial statement. 3. Some of the items included under administrative and other expenses are as follows: Group life insurance for office staff Christmas gifts to staff (under $200 each) Dues to golf club (for employee) Meals and drinks for clients Books (15-volume set on veterinary medicine) Interest on car loan (six months) Finder's fee for a loan to finance equipment $1,300 1,700 1,400 400 3,600 2,500 1,200 4. Vehicle costs include operating costs of $2,900 for the automobile (including $400 for car parking). The automobile was driven 24,000 km. Of this, 12,000 km was for customer travel, 2,000 km was for travel between her home and the clinic, and 10,000 km was for personal travel. 5. Ava expects that a number of the new manufactured surgical instruments will be returned for modification, which she will do at no extra cost to the customer. The income statement includes a $2,400 deduction based on her estimate of the returns. As of December 31, $1,000 of costs were incurred for returned items. 6. Ava moved from rented premises to new rented premises on February 28, with 20 months remaining on the old lease. The landlord accepted a payment of $9,700 in exchange for cancelling the lease. The accounting records have amortized this cost over the remainder of the lease term and accordingly have deducted $4,850 as rent expense. 7. Capital cost allowance (CCA) for tax purposes has been correctly calculated as $18,200. Required: Determine Ava's business income for tax purposes for 2022 taxation year. Answer is complete but not entirely correct. Net Income per financial statements $ 149,700 Interest Income $ (3,600) Depreciation of Fixed Assets $ 27,800 Amortization of development costs 3,600 Research and development - actual (18,200) Dues to golf club 1,400 Meals and drinks for clients 200 Books (15-volume set on veterinary medicine) $ 3,600 Car loan interest expense 1,250 Finder s fee for a loan to finance equipment $ 2,700 Car operating expense 2,500 Reserve for Return Sales 2,400 Return sales - Actual (1,000) Rent Expense $ (4,850) Capital Cost Allowance $ (18,200) Net Income from Business for Tax purposes $ 149,300