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Question 2 Morgon Inc. carries on a business and uses a taxation year ending December 31. The sole shareholder of the Company is Helen Morgon.

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Question 2 Morgon Inc. carries on a business and uses a taxation year ending December 31. The sole shareholder of the Company is Helen Morgon. For the current taxation year, Ms. Morgon's daughter, Summer, who maintains the books and records of the Company, has calculated 2021 net income of $193,200. In determining net income Summer begins with accounting income applying ASPE. Other Information: 1. During the year, Morgon Inc. spent $12,700 for landscaping the grounds around its office. In accordance with ASPE, this amount was treated as a capital expenditure. As the work was done late in the year, no amortization was claimed for the current year. 2. The following items were included in the expenses claimed for accounting purposes: Amortization expense $69,300 Golf club membership fees for Helen and Summer 15,000 Cost of sponsoring local soccer teams 7,200 Advertising on a foreign television station (Directed at Canadian market) 9,600 Advertising circulars (Only one-quarter distributed) 12,400 Business meals and entertainment 22,000 Charitable donations 31,900 Loss from theft 16,200 Interest paid on building mortgage 24,200 Interest paid on late income tax instalments 1,400 Appraisal costs on land to be sold 4,200 Damages received resulting from breach of contract 3,800 3. Included in the accounting expenses were $14,000 in fees paid to Summer's 16 year old son for creating and maintaining the web site of Morgon Inc. In determining the fee, Helen found that it would cost at least $25,000 to obtain the equivalent services from an outside consultant. 4. Maximum CCA has been determined to be $94,200 for the current taxation year. 5. Had the contract in which damages were paid been completed, it would have increased business income, Required: Calculate Morgan Inc.s' 2021 business income. Explain the reason for excluding any of the amounts

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