XYZ Inc. has a taxation year that ends on December 31. For the year ending December 31, 2021, the companys accounting statements prepared in accordance with generally accepted accounting principles showed Net Income of $2,467,000. The accountant has provided the following information that was used in the preparation of this Net Income figure.

Instructions:

For each "question", provide the effect on the reconciliation of Net Income for Accounting Purposes to minimum Net Income for Tax Purposes.

Additions to Net Income for Accounting Purposes should be entered in the box as a positive number. Deductions from Net Income for Accounting Purposes should be entered in the box as a negative number. If the item would have no effect on the reconciliation, enter the number 0 (zero) in the box.

IMPORTANT:

Round all answers to the nearest dollar if applicable. Be sure about the sign of your answer. Items will be marked incorrectly if they have the wrong sign. 1. A Senior VP of the company was reimbursed for her business travel using her own personal automobile. She received $0.71 per kilometre for the 4,000 kilometres that she drove for business purposes. This reimbursement was not included in her income as a taxable benefit. The company deducted the reimbursement as part of Travel Expenses in the calculation of Net Income for Accounting Purposes. 2. The company paid $4,000 in appraisal fees as required by their insurance company. 3. During the year, the company did not incur any Meals and Entertainment for entertaining clients. However, they did spend $26,000 on a company-wide staff party. The full amount was expensed in the calculation of Net Income for Accounting Purposes. 4. Current Income Tax Expense of $239,800 and Future Income Tax Expense of $210,100 was deducted in the calculation of Net Income for Accounting Purposes. 5. Accounting expenses include $1,000 for the premiums on a life insurance policy on the life of the companys president. The company is the beneficiary of this policy. One of the companys major creditors requires that this policy be in force during all periods in which there are loan balances outstanding. 6. The Company disposed of all of their Class 8 assets during the year. They had not replaced them as of December 31, 2021. The Class 8 UCC balance on January 1, 2021 was $42,000. The assets cost $108,000 when they were originally purchased and the company was able to sell them for $65,000. Ignore any accounting gain or loss that may have resulted from this transaction. 7. The Company had no Class 10 balance at the beginning of the year. In May, the company purchased a number of Class 10 delivery vehicles for a total of $150,000. These vehicles were capitalized and depreciated in the financial statements in accordance with GAAP. 8. The balance in Class 14.1 at the beginning of 2021 was $54,000. No new items were added to Class 14.1 nor were there any dispositions during the year. 9. The Company deducted Advertising and Promotion Expense of $39,000 that included $12,400 in donations to a local food bank (a registered charity). 10. During 2020, the Company paid a total of $81,000 in dues to a nearby golf club for the executive team.