Dr. Sweet is a dentist with a well established practicein smith falls. Ontario. She has sought your advice regarding deductibility of the expenditures made during the current taxation year.

1. Insurance payments included a $680 premium for

coverage of her office and

contents, $1,800 for malpractice coverage, and

$1,700 in life insurance

premiums.

2. Payments were made to a collection agency in the

amount of $1,250 for

assistance in collecting past due amounts from

patients.

3. Contributions of $600 were made to various

registered charities.

4. Dr. Sweet paid a total of $18,000 to her husband

for his services as a full-time

bookkeeper and receptionist.

5. mDr. Sweet paid $5,000 for a painting by a

Canadian artist that has been hung in

her waiting room. This painting was capitalized on

the financial statements.

6. An amount of $1,000 was paid for membership in a

racquets club. In addition,

$1,300 was spent for court time, approximately 40

percent of which was for time

spent playing with patients.

7. Dr. Sweet was required to pay federal taxes of

$13,000.

8. During the year, Dr. Sweet spent $3,200

purchasing provincial lottery tickets.

Required:

Advise Dr. Sweet with respect to the deductibility of the preceding expenditures

in the calculation of Net Income For Tax Purposes. Explain your position on each expendi-

ture