Last year your construction company had operating revenues of $1,240,000, operating costs of $520,000 and a CCA of $98,000 based upon existing assets. The beginning of that same year the company bought essential new equipment for $130,000. This equipment has a CCA rate of 30%. The company has borrowed money and is paying $18,000 per year in interest. Interest paid on borrowed money is tax deductible, so it reduces the taxable income. You also managed somehow to deduct the first-class flight tickets for all the vice-presidents and their spouses on a business trip to Cancun, Mexico, which cost a total of $50,000. The tax rate is 37.62%.

8-7 What is the taxable income?