Ques 1 The following condensed income statement for accounting purposes is for IBM Co. Ltd., a Canadian-controlled private corporation, for its scal year ended December 31, 2018. IBM Co. Ltd. was incorporated in 1990 and has continued in the same retail business since that time. IBM Co. Ltd. Income Statement For the year ended December 31, 2018 Sales $600,000 Cost of sales see note (1) $365,000 Administrative and selling expenses see note (2) 110,000 475,000 125,000 Other income and extraordinary expense see note (3) 5,000 Net income before income taxes 350,000 Provision for income taxes _8_5,D_O Net income after income taxes m A ' ' n 1 m n Inf rm ' n Note (1) gamma Inventory Dec. 31, 2017 net of a reserve for potential decline in market prices of $10,000 $100,000 Net purchases M 500,000 Inventory Dec. 31, 2018 $150,000 Less: a reserve for a potential decline in market prices 15,000 1 000 w Note (2) A 'ni tr ' nd llin selected amounts only A. Included in the advertising account were the following amounts: (i) advertising in two upper New York State newspapers for mail order purposes from the USA 1,500 (ii) uniforms for a local girl's baseball team 400 B. Included in the financial costs account were the following selected amounts: (1) purchase of customer list from a reliable source to solicit sales 3,000 (ii) cost of issuing new share capital 750 Note (3) W selected amounts only A. The company sold the following capital property during 2018: Book Cost Value Proceeds Securities $ 5,000 $ 5,000$ 3,000 Land* 50,000 25,000 135,000 Building* 102,500 30,000 175,000 Truck 8,000 500 200