Limerick Supplies is a business carried on by James Foster as a sole proprietorship. For the fiscal period ending December $31,2023,$ James has determined that the business income for accounting purposes is $$88,000,$ which is calculated using ASPE.

clew the addifionalintormation.

Required

Calculate the minimum $2023$ business income for James Foster. Indicate why you have not included any of the preceding items in your calculations.

Calculate the minimum $2023$ business income.

Accounting Income

Additions:

Amortization expense

Reserve for inventory obsolescence

Business Meals$-$non$-$deductible $50\%$

Charitable Donations

Cost of advertising on a U$.$S$.$ Radio Station to the Canadian Market

Unused Advertising Circulars

Appraisal costs on land to be sold

Total Additions

Deductions:

Landscaping Costs

CCA

Total Deductions

$2023$ Business Income

Additional Information

In determining accounting business income, James deducted $$32,900$ in amortization expense and would be eligible to claim maximum CCA of $$43,200.2.$ Accounting expenses included a reserve for doubtful debts of $$5,000$ and a reserve for inventory obsolescence of $$8,700.$ The method for determining doubtful debts for accounting purposes is the same as that used for income tax purposes.

During the year, Limerick Supplies spent $$5,100$ for landscaping the grounds around its Winnipeg office. The amount was capitalized for accounting

purposes. Since the expenditure was made late in the year, no amortization was deducted for the current year.

Accounting expenses included $$12,500$ in business meals as well as $$2,100$ in charitable donations.

The business spent $$3,600$ for advertisements on a U$.$S$.$ radio station. As the station is on the border with Manitoba, the audience for this station is largely Canadian residents.

James spent $$5,800$ for advertising circulars, charging the full amount to expense. As of December $31,2023,$ one$-$half of the circulars were still on hand.

One of Jaden's employees stole cash in the amount of $$1,200.$ As the individual has left town, this amount is unlikely to be recovered.

The additional items below were included in the accounting expenses.

Cost of sponsoring local hockey team

$$,2,300$

Interest on building mortgage

$6,800$

Appraisal costs on land to be sold

$2,500$

Damages resulting from breach of contract.

$1,000$

Had the contract been fulfilled, the amounts

would have been business income.

$9.$ Also included in the accounting expenses were $$1,900$ in fees paid to Jaden's $16-$year$-$old son for creating and maintaining the website of Limerick Supplies. In determining the amount to pay, James found that it would have cost at least $$2,800$ to obtain the equivalent services from an external consultant.

Limerick Supplies is a business carried on by James Foster as a sole proprietorship. For the fiscal period ending December $31,2023,$ James has determined that the business income for accounting purposes is $$88,000,$ which is calculated using ASPE.

clew the addifionalintormation.

Required

Calculate the minimum $2023$ business income for James Foster. Indicate why you have not included any of the preceding items in your calculations.

Calculate the minimum $2023$ business income.

Accounting Income

Additions:

Amortization expense

Reserve for inventory obsolescence

Business Meals$-$non$-$deductible $50\%$

Charitable Donations

Cost of advertising on a U$.$S$.$ Radio Station to the Canadian Market

Unused Advertising Circulars

Appraisal costs on land to be sold

Total Additions

Deductions:

Landscaping Costs

CCA

Total Deductions

$2023$ Business Income..