Problem 5-7 Cherniak Business Income Simone Cherniak has just completed the second year of operating her veterinary clinic. You have been retained by Chemniak for Tax aftance ond advice to recent meeting, you gathered information on her practice which is presented below For the year ended December 31, 2019, the circ showed a profit of $164700, as follows Professional service Groupont from surgical instrument sales $627200 27.300 $464,500 02.000 150700 4000 $164200 Administration and other expenses Interest income Net Income included in the above is depreciation amortization expense of $30.600 on fixed assets and motion of development costs of $5.000. Adomona information boutined below On February 28 2019. Chenik purchased a common business and merged it with her own. The folowing users were acquired Truck Equipment 524.000 05.000 2 2 During the year. Chen designed and tested a new curgicontent Out 2019, a legole of 55 300 for 20 year region this amount is included in bdmonente in October $250 war scent on consultants to research mely and costs TE Next > 3 Some of the items included under administrative and other expenses are as follows $1400 1900 1.500 Group life insurance for office staff Christmas gifts to staff under $200 each Dues to golf club for employee) Mesis and drinks for clients Book 15-volume set on veterinary medicine Interest on cat loans months) Finder's fee for a loan to finance equipment 400 4.000 2.000 1.300 4 The income statement includes a cost of $4.300 for attending the conventions during the year Convention 11.000 was invy 2010. Convention 2 (51900) and 13 (51400 were both in December 2019 Each convention includes a cost of $170 for meals. For each of the December conto the airfare of $350) was included in accounts payable at the end of the year 5 Vehicle costs include operating costs of $3.200 for the automobile including 5400 for Corning The Sutomobile was drven 24 000 km 12000 kom was for customer travel 2000 km was for travel between her home and the clinic and 10.000 km wat for personal travel 6 Chetik expects that a number of the new muractured surgical Instruments will be returned for modification which she wide to extract une 7. Chemiak moved from rented premises to new rented premises on February 28, 2019, with 20 months remaining on the old lease. The landiord accepted a payment of $10.700. In exchange for cancelling the lease. The accounting records have amortized this cost over the remainder of the lease term and accordingly have deducted $5,350 as rent expense. 8 Capital cost allowance (CCA) for tax purposes has been correctly calculated as $20,000 Required: Determine Cherniak's net income from business for tax purposes for the 2019 taxation year Net Income per financial statements Legal fees for Patent registration 5 Assessment Tool Frame 164 700 5.300 S Required: Determine Cherniak's net income from business for tax purposes for the 2019 taxation year Net Income per financial statements Legal fees for Patent registration $ 164,700 5,300 $ Net Income from Business for Tax purposes $ 170.000 Problem 5-7 Cherniak Business Income Simone Cherniak has just completed the second year of operating her veterinary clinic. You have been retained by Chemniak for Tax aftance ond advice to recent meeting, you gathered information on her practice which is presented below For the year ended December 31, 2019, the circ showed a profit of $164700, as follows Professional service Groupont from surgical instrument sales $627200 27.300 $464,500 02.000 150700 4000 $164200 Administration and other expenses Interest income Net Income included in the above is depreciation amortization expense of $30.600 on fixed assets and motion of development costs of $5.000. Adomona information boutined below On February 28 2019. Chenik purchased a common business and merged it with her own. The folowing users were acquired Truck Equipment 524.000 05.000 2 2 During the year. Chen designed and tested a new curgicontent Out 2019, a legole of 55 300 for 20 year region this amount is included in bdmonente in October $250 war scent on consultants to research mely and costs TE Next > 3 Some of the items included under administrative and other expenses are as follows $1400 1900 1.500 Group life insurance for office staff Christmas gifts to staff under $200 each Dues to golf club for employee) Mesis and drinks for clients Book 15-volume set on veterinary medicine Interest on cat loans months) Finder's fee for a loan to finance equipment 400 4.000 2.000 1.300 4 The income statement includes a cost of $4.300 for attending the conventions during the year Convention 11.000 was invy 2010. Convention 2 (51900) and 13 (51400 were both in December 2019 Each convention includes a cost of $170 for meals. For each of the December conto the airfare of $350) was included in accounts payable at the end of the year 5 Vehicle costs include operating costs of $3.200 for the automobile including 5400 for Corning The Sutomobile was drven 24 000 km 12000 kom was for customer travel 2000 km was for travel between her home and the clinic and 10.000 km wat for personal travel 6 Chetik expects that a number of the new muractured surgical Instruments will be returned for modification which she wide to extract une 7. Chemiak moved from rented premises to new rented premises on February 28, 2019, with 20 months remaining on the old lease. The landiord accepted a payment of $10.700. In exchange for cancelling the lease. The accounting records have amortized this cost over the remainder of the lease term and accordingly have deducted $5,350 as rent expense. 8 Capital cost allowance (CCA) for tax purposes has been correctly calculated as $20,000 Required: Determine Cherniak's net income from business for tax purposes for the 2019 taxation year Net Income per financial statements Legal fees for Patent registration 5 Assessment Tool Frame 164 700 5.300 S Required: Determine Cherniak's net income from business for tax purposes for the 2019 taxation year Net Income per financial statements Legal fees for Patent registration $ 164,700 5,300 $ Net Income from Business for Tax purposes $ 170.000