Mr. Davis, age 45, who resides in Vancouver, has provided you with the following information concerning his 2021:
tax return:

Employment income for tax purposes: $120,000
Proprietorship (business):
Income Statement for the year ended December 31, 2021

Revenues $200,000
Expenses:
Cost of goods sold $80,000
General and administrative 20,000
Depreciation 35,000
Other expenses 5,000
Total expenses (140,000)
Net income before tax $60,000
Tax expense (18,000)
Net income after tax $42,000
Additional information:
— General and administrative expenses include Golf membership fees of $2,000
—Other expenses include interest and penalties on income tax assessment of $3,000
—CCA for the year was $30,000

—He sold equipment he used in his business (an only asset in class). There was no accounting gain or loss realized.
Details of this sale for tax purposes:

Equipment
Original cost $100,000
UCC, January 1, 2021 95,000
Proceeds of disposition 80,000

Property income (loss) for tax purposes:
Rental loss (not due to CCA) -15,000
Canadian interest income 12,000
Taxable dividends, in cash, are received from:
— taxable Canadian public corporations (eligible) 8,000
Interest on bank loan to purchase Canadian
securities that yield the above dividends -2,000

Taxable capital gains (allowable capital losses):
Shares of X Ltd., a Canadian public company -17,000
Shares of Y Ltd., a Canadian public company 6,000
Listed personal property 4,000
Personal-use property -2,000

Other:
—Mr. Davis received child support in the amount of $10,000 and spousal support of $7,000.
—He contributed to TFSA in the amount of $15,000.
—He paid child care costs of $9,000 for his 6-year-old child (Earned income for child care costs is $175,000).

Required:

Compute Mr. Davis’s Net Income for Tax Purposes (Division B income), according to the rules in Section 3. All items must be correctly located in the correct paragraph to obtain marks. (Hint: Calculate Net Business Income with Recapture/Terminal loss, Net Property Income, Net Taxable Capital Gains, Child Care Costs first. Then put everything together under Section 3).