Question 5 (9 marks)

Fenton Corp. (Fenton), a Canadian-controlled private corporation, provided the following condensed income statement for its year ended December 31, 2020:

Revenues	$1,750,000
Expenses	1,155,000
Accounting income	$ 595,000

Other information:

1. Revenues include an accounting gain of $140,000 on the disposal of a building, which was on leased land. Proceeds of disposal for the building were $515,000, and the original cost was $425,000. The building is the only asset in Class 1.
2. In 2018, Fenton sold shares that resulted in a net capital loss of $12,500. This amount carried forward to 2020.
3. Expenses for the 2020 year included the following:
   • Donations: $7,500
   • Meals and entertainment: $17,000
   • Landscaping: $45,000
   • Golf club membership for salesperson: $8,000
   • Employer contributions to Registered Pension Plan of employees: $20,000
4. During 2020, Fenton received dividends from Canadian taxable corporations of $125,000, which is included in net income. All other income earned by Fenton is active business income.
5. A passenger vehicle with a cost of $36,000 was purchased during 2020.
6. Amortization expense in 2020 was $13,500.
7. Fenton will claim the maximum allowable capital cost allowance (CCA) in 2020. The CCA classes and related 2020 opening undepreciated capital cost (UCC) balances were as follows:

Class	Beginning UCC
1	$385,000
8	$ 5,500
10	$ 61,000

6)

Required:

1. Calculate Fentons net income for tax purposes for 2020. (7.5 marks)

Calculate Fentons minimum taxable income for 2020. (1.5 marks)