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Jane Doe is the sole shareholder of Doe Enterprises Ltd. and provides you with the following financial statements for the fiscal year ended December 31 of the current year:

Doe Enterprises Ltd.

Statement of Income

For the year ended December 31 (current year)

Income:		$ 750,000
Cost of sales:
Opening inventory	150,000
Purchases	350,000
Closing inventory	(50,000)	(450,000)
Gross Income		300,000
Expenses:
Accounting and legal	3,000
Advertising and promotion (Note 1)	6,000
Bad debts	5,000
Business tax	1,000
Club dues (Note 2)	1,000
Depreciation & amortization (Note 3)	15,000
Donations (Note 4)	2,000
Insurance (Note 5)	4,000
Interest expense	4,500
Office expense (Note 6)	10,000
Rent	12,000
Salaries and benefits	78,500
Travel (Note 7)	7,000	(149,000)
Sub-total		$ 151,000
Other Income (Note 8)		5,000
NET INCOME FOR THE YEAR		156,000

NOTES TO THE STATEMENT OF INCOME:

1. Advertising expenses include the cost of season hockey tickets ($3,000). The tickets are used to entertain customers and for other promotional purposes.
2. Jane takes customers to the Royal Golf Club regularly and frequently. Club membership dues paid during the current fiscal year were $1,000.
3. Depreciation & amortization: for accounting purposes the amortization for tangible and intangible property are both calculated on a straight-line basis.
4. The corporation made a donation of $2,000 to United Way, a registered charitable organization.
5. Insurance includes life insurance premiums for Jane Doe in the amount of $2,000. The life insurance policy is not required as collateral for the companys bank loan.
6. Office expense includes the purchase of a fax machine for $2,500 on September 1, of the current year. Jane uses the fax machine for business purposes.
7. Travel expenses include $3,200 for the cost of meals incurred on business trips during the year.
8. Other income includes interest income of $2,000, which is considered incidental to business operations, and $3,000 in dividends received from a small investment portfolio held by the corporation.
9. Additional information, not included on the financial statements: during the year the company sold a truck for $15,000; the original cost of the truck was $29,000 and its current market value is approximately $16,000. The company also purchased a new truck for $25,000.

OTHER PERTINENT INFORMATION FOR DOE ENTERPRISES LTD.:

1. 1. Doe Enterprises Ltd. is a Canadian Controlled Private Corporation (CCPC).
   2. Jane Doe is the sole shareholder of the company; she is a Canadian resident.
   3. Information from the prior years corporate tax return:

2. UCC Class 8, closing balance = $25,000

   UCC Class 10, closing balance = $43,000

   UCC Class 14.1, closing balance = $3,000

   Required:

3. 1. Compute NIFT and taxable income for the corporation
   2. Compute Part I tax payable for the corporation

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