CoursHeroTranscribedText: 40. Award: 10.00 points KM Ltd. is a Canadian-controlled private corporation, operating a small gift store in Vancouver. The company has a December 31st year -end . KM's financial statements reported net income before taxes of $210,000 in 20x0. Financial information relating to 20x0 is as follows : Land adjacent to the gift shop was purchased with a $75,000 bank loan during the year to allow for an outdoor sales area during warm weather. Interest expense on the loan for the year was $9,600. and the appraisal fee to finance the loan was $1,000 . Both the interest and the appraisal fee were expensed by KM in 20x0. The company hired a contractor to landscape e the land . The $5,000 bill for the landscaping was paid in full during the year and capitalized on KM's Balance Sheet . During the year, a new display case worth $2,000 was purchased and expensed on the books. Amortization expense of $21,000 was deducted during the year. Total CCA (following any adjustments ) for the year was $16,000 and is not reflected in the financial statements The following were also expensed during the year : Meals with clients $1,400.00 Snow removal service $1,000.00 Golf dues for employees $5,000.00 reasonable reserve for bad debt $2,000.00 On December 30th , KM's president announced a bonus to be paid to the company's key employee in the amount of $5,000, which was expensed on the books that day. The employee will receive the bonus in 20x1 in equal payments of $2,500 , to be issued on January 30th and July 30th . Required: Determine KM Ltd.'s net income for tax purposes for 20x0. Net income from financial statements $210,000.00 Add Amortization 5.18 (1)(b) $21,000.00 Display cases (capital item ) S.18(1)(b) $2,000.00 Financing costs S.20 (1) (e) 4/5 x 1,000 $800.00 Meals (1/2) 5.67.1 $700.00 Golf club dues S.18(1)(1) $5,000.00 Bonus payment (July 30) S.78(4) $2.500.00 Subtract Landscaping 5.20 (1)(aa $5.000.00 CCA S.20 (1)(a) $16,000.00 Net income for tax purposes $ 221,000.00