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Ava Miller has just completed the second year of operating her veterinary clinic. You have been retained by Ava for tax

assistance and advice. At a recent meeting, you gathered information on her practice, which is presented below.

For the year ended December $31,2023,$ the clinic showed a profit of $$123,700,$ as follows:

Included in the above is depreciation$/$amortization expense of $$23,000$ on fixed assets and amortization of

development costs of $$3,000$ related to the metal alloy research. Additional information for $2023$ is outlined below.

On February $28,$ Ava purchased a competitor's business and merged it with her own. The following assets were

acquired:

Truck $$18,000$

Equipment $50,000$

During the year, Ava designed and patented a new surgical instrument. On July $1,$ a legal fee of $$4,000$ was incurred

in applying to the federal government for the patent registration $($life of $20$ years$)$; this amount is included in

administration expenses. In October, $$15,000$ was spent on consultants to research metal alloys, and this cost is

being amortized over five years as development costs in the financial statement.

Some of the items included under administrative and other expenses are as follows:

Vehicle costs deducted on the income statement include operating costs of $$2,400$ for the automobile $($including

$$400$ for car parking$).$ The automobile was driven $24,000$ kilometres. Of this, $12,000$ kilometres were for customer

travel, $2,000$ kilometres were for travel between her home and the clinic, and $10,000$ kilometres were for personal

travel.

Ava expects that a number of the new manufactured surgical instruments will be returned for modification, which she

will do at no extra cost to the customer. The income statement includes a $$2,000$ deduction based on her estimate of

the returns. As of December $31,$$$800$ of costs were incurred for returned items.

Ava moved from rented premises to new rented premises on February $28,$ with $20$ months remaining on the old

lease. The landlord accepted a payment of $$8,000$ in exchange for cancelling the lease. The accounting records

have amortized this cost over the remainder of the lease term and accordingly have deducted $$4,000($ $$8,00010$

months$/20$ months$)$ as rent expense.

Capital cost allowance $($CCA$)$ for tax purposes has been correctly calculated as $$15,000.$

Required:

Determine Ava's business income for tax purposes for $2023$ taxation year.

$1$

Ava Miller has just completed the sccond yeat of operaling her veletinary cinic You have been relained by Ava for lax assistance and advice. At a recent meeting you gathered informalion on her practice, which is presented below.

For the year ended December $31,2023,$ the clinic showed a profit of $$149,700,$ as follows

$01$:$42$:$11$

Professional service

tross profit fron surgical instrument sales

Adralnistrotion and other expenses

Interest incone

Net incone

$\backslash$table$[[$$$388,469$

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