Exercise Eight - 4 Subject: Warranties On Capital Assets During the taxation year ending December 31, 2010, Vivid Ltd, sells a capital asset with an adjusted cost base of $237,000 for proceeds of $292,000. The Company provides the purchaser with a one year warranty and the Company estimates that it will cost $4,500 to fulfill the warranty provisions. On October 1, 2011, the Company spends $4,800 to fulfill the warranty provisions. Determine the effect of these trans- actions on Net Income For Tax Purposes for 2010 and 2011