Kindly answer the following Canadian business taxation question. Please provide the calculation to lead the answer. Thank you.

Your client, a Canadian controlled private corporation has prepared its own financial statements for the year ended December 31, 2019.

The financial statements are not necessarily in accordance with generally accepted accounting principles.

Balance Sheet

Assets:

Cash$75,401

AR131,520

Inventory526,810

733,731

Capital assets, net of amortization1,883,200

Development costs178,750

Goodwill1,200,000

$3,995,681

Liabilities:

AP$229,090

Long-term debt866,295

1,095,385

Shareholders' Equity:

Share capital 110,000

Contributed surplus1,200,000

Retained earnings1,590,296

2,900,296

$3,955,681

Statement of Income and Retained Earnings

Sales$1,503,850

Cost of sales

Opening Inventory$287,120

Material costs715,690

Wages215,321

Amortization165,000

Rent55,000

Overhead32,300

Closing inventory(526,819)942,621

Gross Profit560,229

Expenses

Administrative salaries and benefits81,720

Advertising22,551

Amortization of capital assets20,860

Automotive expenses7,390

Bad debts 6,514

Charitable donations500

Interest expense

On building loan23,833

On equipment loan15,506

Loss on sale of computer17,500

Management bonuses73,654

Meals and entertainments 7,815

Insurance Expense3,600

Office expense8,312

Professional fees8,020

Sales commissions and benefits 37,977

355,752

Income before income taxes244,477

Income taxes 51,600

Net income for the year 172,877

Retained earnings, beginning of year1,417,419

Retained earnings, end of year$1,590,296

The following information was provided by the company's accountant who prepared the financial statements:

1.Accounts receivable - the company provides an allowance for doubtful accounts for accounting purposes, based on historical experience, equal to 4% of gross receivables.

ARAllowanceNet

Dec 31,'18$120,0004,800115,200

Dec 31,'19137,0005,480131,520

The actual doubtful accounts, based on a review of the aged listing, were $2,200 and #6,300 at Dec 31,'18 and Dec 31,'19, respectively.

2.Inventory - The inventory is valued at cost which is determined on a direct cost basis One particular line of parts which is included in inventory has a market value of nil but is recorded on the books at $35,000. The write-down has not been recorded since the total cost of inventory is less than the total market value.

3.Capital assets, net of amortization-

Dec 31, '19 Dec 31, '18

Cost Accumulated Amortization NBV Cost Accumulated Amortization NBV

Land 300,000 - - 300,000 - -

Building under

Construction 800,000 - - 800,000 - - Manifacturing

Equipment 1,525,060 857,000 668,060 1,370,000 692,000 678,000 Computer

Equipment 33,000 17360 15,640 33000 16,000 17,000 Computer

hardware 110,000 16500 93,500 70000 28,000 42,000 Computer

software 12,000 6000 6,000 12000 3,000 9,000 $2,780,060.00 $896,860.00 $ 1,883,200.00 $1,485,000.00 $739,000.00 $746,000.00

The company began the construction of a building to house their manufacturing operations in September 2019. The building has an estimated completion date of May 2020.

The company replaced its computer hardware in 2019. The old equipment was depreciated to a net book value of $42,000 and its disposition resulted in a loss of $17,500. The old computer hardware was included in Class10 for CCA purposes.

The company purchased a pirce of manufacturing equipment during the year for $155,060.

There were no other additions or deletions of capital assets during the year. The closing UCC's at Dec 31,'18 were:

Class 8$25,000

Class 1026,000

Class 43410,000

4. Purchases - During the year the company bought $32,000 worth of new furniture for the office.

5. Goodwill - the company had a valuation completed by an independent valuator early this year. The valuation identified that the company had goodwill of $1200,000. The company recorded the goodwill In order to enhance the financial position of the company to potential investors.

6. Accounts Payable - Accounts payable at Dec 31,'19 included bonuses payable to employees unrelated to the company of $25,000 and bonuses payable to employees related to the company of $35,000. The bonuses were considered reasonable and were paid on June 31,'20 before the '19 tax returns were filed.

7. Insurance Expense - As a result of the bank demanding collateral security on the bank loan which the company had during the year the company paid $300 Life Insurance on the President of the company each month starting Jan 1,'19. The bank loan was paid off on Oct 31,'19.

8. Legal Expense - In '17 the company spent $10,000 in legal fees where the company raised $50,000 in capital by issuing more shares to buy more assets for the company.

REQUIRED

Determine the minimum Division B income for tax purposes of the company for the year ended Dec 31, '19.