Bruce also requires a calculation of taxable income for the most recent year ended December 31, 2019. The calculation should be prepared in Excel. He has also requested that you prepare the year-end journal entry for taxes payable using a marginal rate of 14% on income less than the small business deduction. Bruce has provided you with the draft statement of income and retained earnings (Appendix II) and additional information you will need (Appendix III).

Appendix II Quality Cabinets In Statement of income and retained earning For the period ended December 31 (Draft)

	Current year	Prior year
	(Draft)	(Audited)
Sales	$ 8,959,800	$ 8,834,000
Cost of sales	5,949,648	6,129,709
Gross profit	3,010,152	2,704,291
Expenses:
Advertising and promotion	357,900	266,500
Amortization	219,163	166,584
Automobile	140,800	102,600
Bad debts	17,250	19,110
Donations	1,200	1,000
Dues and fees	7,500
Insurance	69,600	57,200
Interest and bank charges	119,203	46,600
Office	101,200	108,700
Professional fees	67,700	34,800
Property taxes	44,700	40,900
Repairs and maintenance	207,100	155,100
Rent expense	84,654
Salaries and wages	1,160,460	1,175,600
Travel	117,666	103,900
Utilities	67,600	60,200
Warranty	72,059	69,482
Income before taxes	154,397	296,015
Income taxes (Note 1)	70,000	76,754
Net income	84,397	219,261
Retained earnings, opening	2,571,214	2,360,953
Dividends	48,750	9,000
Retained earnings, closing	$ 2,606,861	$ 2,571,214

Prob - Compatibility Mode - Saved to my Mac Share Comments AutoSaveFF OSUE Home Insert Draw Design Layout References Mailings Review Arial 12 AA Aa A Ever Peste 3 B IV*XX ADA E S View 21 OB A - AaRtCDF ABCDE ABACODE AAC Namal Body Tent ListParagraph No Spacing d Table Paragr... AaBbCcDd Heading I Styles Dictate Sensitivity Appendix II Tax Information Prepared by Bruce MacDonald 1. Information regarding property, plant, and equipment at Decerntier 31: Additions to property, plant, and equipment: Manufacturing equipment S 313.888 Delivery trucks 189,370 Office equipment 14.230 Computer hardwarr 12.110 Campuuter software 13.670 Lewed asset 1.00067 S 16011235 All software additions this year were application software Quality's building was purchased five years ago. At that time, Quality did not make an election to place the building in a separate Class 1 at the accelerated rate of 10% 5326,625 of amortization is included in current-year cost of sales in the income staternent. Lease payments related to the capitalized lease asset for the year amounted to 598.000 and interest on the lease liablity (included in interest and bank charges) was $48,503. Lease payments under the provincial land agreement totalled $38,000 and were included in rent expense 2. Undepreciated capital cost balances at the beginning of the year were as follows: $ 416.400 Class 8 131.800 Class 10 78.300 Class 12 15.300 Class 50 4,380 $ 644 160 3. Bruce is a member of the Predator Ridge Golf and Country Club (PRGCC), where he entertains many of the company's custom and suppliers. Payments to PRGCC during the year are included in advertising and promotion and consisted of the folowing Monthly dues: $8.280 (total for the year) . Green fees: $4,360 Restaurant and beverage costs: $10,290 Page 4 of 5 1225 words English United States) Focus E G = = -- - + 98%