The Bath House Inc. is located in Vancouver, B.C. and sells bathtubs, showers, vanities, toilets, etc. to the residential market. During 2021, it decided to move out of its leased premises and purchase a larger retail space so it could expand and service the commercial/industrial market. It spent $10,000 on site investigation. It cancelled its lease as of June 30, 2021 at a cost of $15,000 when it moved into its owned location. There were four (4) years left on the lease, and two renewal periods of three (3) years each. Its income statement for 2021 and explanatory notes are below: Sales Cost of goods sold Gross profit Operating expenses Advertising and promotion Depreciation 2,500,000 Note 1 750,000 1,750,000 100,000 Note 2 Telecommunications Warranty expense Bank charges and interest Insurance Interest on long-term debt Office Rent Repairs and maintenance Salaries and benefits Utilities 10,000 Note 3 240,000 Note 4 46,000 31,000 60,000 Note 5 108,000 Note 6 87,000 578,000 Note 7 22,000 35,000 150,000 Note 8 1,467,000 Operating income 283,000 Other income (loss) Income from investment portfolio 17,000 Loss on disposition of capital assets 26,000 9,000 Net income before tax Provision for income tax Net income 274,000 41,000 233,000