Reference no: EM132760058

Olive twelve academy inc has just completed its fiscal year ended dec 31, wow I. Using GAAP the accountant has determine that the company has experienced a net loss before taxes and a ortiza expense of $126,000.

The accountant provides the following info that was used in determining the net loss for accounting purposes.

1. the company was forced to pay damages of $12,300 for failure to perform service co tract. The was amount paid when the client threatened to bring action for breach of contract. The $12,300 was expensed in current year.
2. company's property tax expense of $19,500 includes amount of $1600 paid to regional municipality where company maintains fishing lodge for its employees.
3. company's expenses include contributions s to registered charities of $12,900
4. companys expenses include amount tax paid in 2018 for new landscaping at their administration building for $9800
5. conoany deducted loss of $10100 resulting in theft from one of its clerical employees
6. effective dec 31 2019 as a result of a change in its distribution system, company was forced to cancel the a year lease tha would have been in force until jan1 2027. During 2018 taxation year the company agreed to pay and deducted damages in amount of $17000. On dec 31 $5000 of this amount had not been paid
7. current salary expense included a bonus payable to the companys president for $14500 paid feb 1 2020
8. insurance expenses included premium on a whole life policy on life of presidents wife for $8500. This was not a group life policy and proceeds where payable to company
9. as company changed property and casualty insurers during the year, all of its assets had to be appraised. Cost of appraisal was $4150 with entire Amon y expenses in the year
10. company wage expense included $51000 in management bonuses (other than that of president in 7) that will not be paid until may 1, 2020. In addition $34000 in bonuses which were deducted for both tax and accounting purposes in 2018 were paid In March 2019
11. bad debt expenses amounted to $11000
12. renovqtion costs for $167000 were charged to expense during the year. This amount resulted from need to completely renovate one of company's offices and involved installation of plumbing and air conditioning systems as well as requiring and installation of new concrete foundations.
13. president and wife attended a convention that resulted in $5,200 in travel expenses for company. Of this amount $1650 related to fact that presidents wife chose to accompany him on This trip
14. companys interest expense included bond discount amortization $750
15. companys legal expenses for the year were $10500 and were related to defence of breach of co tract (#1) $2450, cost of amending articles of incorporation $3600, defenders costs related to income tax reassessment $4450
16. company's expenses included a total amount of $12000 for business meals and entertainment
17. company's calculations for CCA have not yet been completed for 2019 taxation year.

Required:

Problem 1: Compute company's net business income for tax purposes for year ending December 31, 2019 before the consideration of CCA. It is NOT necessary to indicate why you have not included any of the preceding items in your calculation