The following income statement was prepared for Dewey, Cheatem, How and Now, a partnership comprised of four partners who share income equally:

Dewey, Cheatem, How and Now

Income Statement

For the Year Ended December 31, 2019

Gross revenue $ 880250

Expenses

Salaries and benefits staff 229,000

Office salaries 74,000

Rent 32,000

Office supplies 27,000

Client entertainment 5,075

Donations to charities 25,000

Salaries- partners 40,000

Depreciation 18,000

450,075

430,175

Gain on sale of securities 80,000

Dividend income from taxable Canadian companies 25,000

Capital dividends 5,000

110,000

Net income for accounting purposes $ 540,175

The adjusted cost base to Mr. Cheatem of his partnership interest was $ 45,792 at the beginning of the year. His drawings for the 2019 year were $ 77,500. The dividends were

received from a CCPC all of whose income was eligible for the small business deduction.

Available capital cost allowance for 2019 is $ 16,222.

REQUIRED: Insert your responses to each question in the spaces provided below:

(A)The following items from the above financial statement should be added to net income for accounting purposes to calculate net partnership income for tax purposes (add more items to the list below as needed).

Item Amount ($)

1. Taxable Capital Gain $

2. Charitable Donations $

3. Depreciation $

4. Client Entertainment $

5. Partner Salaries $

(B) The following items from the above financial statement should be deducted from net income for accounting purposes to calculate net partnership income for tax purposes (add more items to the list below as needed).

Item Amount ($)

1. Gain for Accounting Purposes $

2. CCA $

3. Client Ent. $

4. Capital Dividends $

( C) Mr. Cheatems adjusted cost base of his partnership interest

at December 31, 2019 is $ _______________