IT'S URGENT!

Question 3 (16 marks) Photo Tonight, a film-developing and camera-repair franchise, began business on January 1, 2021. In the process of beginning operations, it incurred the following capital expenditures: $80,000 30,000 Developing equipment Furniture and fixtures Small tools (under $500) Franchise (expires in 20 years) Incorporation costs 15,000 75,000 3,000 The business was immediately successful and generated substantial profits for the years ended December 31, 2021, and 2022. In 2023, the owner was forced to leave the business due to illness. As a result, the assets were valued and sold on December 31, 2023, for the following values: Developing equipment Furniture and fixtures Small tools Franchise Incorporation costs $ 60,000 15,000 10,000 85,000 0 $170,000 Required: Prepare a schedule showing the maximum deductions for tax purposes available to the company for 2021 and 2022. In addition, for 2023, also show the terminal loss, recapture, or capital gain (if any) as a result of the sale of the assets. Page 6 of 6