The Miracle Ltd is a retail outlet that started business on January 01, 2006 in a leased store in a strip mall. A condensed income statement for the year ended December 31st, 2019 shows the following: Miracle Ltd Condensed Income Statement For the year ended December 31st, 2019 Sales. $ 980,500 Cost of Sales ( 450,100) Gross Profit.. 530,400 General and administrative expenses ( 223,560) Other. ( 74,000) Income before income taxes 232,840 Income tax expense ( 130,900) Net Income 101,940 1. Cost of goods sold include a charge of $9,805 to set up an allowance for returns (at 1% of sales) that are not subsequently saleable at full retail price. No such allowance was recorded last year-end because the company only discovered that the allowance was necessary this year. 2. General and administrative expenses include the following: Contributions to a registered pension plan made monthly for the two key employees, expensed by the Corporations accountant, were as follows: President & CEO Store Manager Compensation $200,000 $130,000 Registered Pension Plan 19,000 15,000 The pension plan is a defined contribution (money purchase) plan. The contributions above were matched by equal contribution by the employee. 3. The company paid the following amounts to Sun Insurance Limited during the year: Group term life insurance for the four full-time employees $2,200 $200,000 term life insurance policy on the president which was included in the insurance expense account. 1,000 $3,200 4. Miracle Ltd. is the beneficiary of the insurance company policy on the president. The term life insurance policy on the president was assigned to the bank as collateral for a $500,000 loan from January 1st through August 30th, 2019. The loan was repaid on September 1st, 2019 in favor of an operating line of credit. 5. The Companys Professional expense account included the following legal and account fees: Accounting fees for yearend work, and monthly bookkeeping. $15,000 Legal fees incurred in relation to leased hold improvement was capitalized ...$ 2,000 Legal and accounting fees incurred in connection with Negotiations for a line of credit at the bank.... $ 4,000 6. An analysis of the cost of sales account revealed that the inventory is valued at average cost within each of the different styles carried. Since the owner is still learning what has appeal, a mark down rack has become a common fixture at the back of the store. The tagged prices of the market-downs are less than their costs, at December 31st, 2019 by $700. The difference has not been recorded in the financial statement.

The following selected information was taken from the Promotions account:- Golf green fees incurred while entertaining suppliers.. $ 3,000 Two summer parties and one Xmas party.. $12,000 Charitable donations to the United Way $ 4,500 Political contribution to local politicians. $ 2,500 Hockey tickets given to suppliers as Xmas gifts. $ 2,800 Meals and entertainment by the owner. $ 2,000 8. Other expenses deducted in the financial accounting computation of income include: Depreciation and amortization.. $47,000 Interest on the loan and operating line of credit.. $ 7,500 Interest on insufficient income tax instalment $ 400 Purchase of additional store fixtures bought at a going-out-business sale. $ 1,500 Damages under a breach of contract suit initiated by a supplier $ 1,700 9. The following additional information was found in the 2019 fixed asset schedules working paper files:- UCC Class 3 210,000 Class 8 110,000 Class 12 5,000 1. The building which cost $510,000 in 1987 was sold for $205,440. It was the only building in Class #3 at the time of the sale. 2. New office furniture was purchased for $20,000. This purchase replaced old assets which were sold for $5,000. None of the old assets was sold for more than their capital cost. 3. Some small tools were sold for a total of $7,000. All of these tools were sold at a price less than their capital cost. 4. Leasehold improvements had been made to a leased warehouse at a cost of $220,000 in 2017. The remaining length of the lease in that year was six years with two successive renewal options of two years each. Further leasehold improvements were recorded in the amount of in total $21,000 for 2019. Required:- Based on the foregoing information, compute the income from business for tax purposes of Miracle Ltd. for its 2019 fiscal year. Show all calculations whether or not they seem relevant to the final answer. Comment briefly on why any items were omitted from the calculation.