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BUSINESS INCOME (Net Income for Tax Purposes) (20 minutes, 12 marks)

Elephant Branch Company is a commercial carpet cleaning company. It had accounting net income of $288,000 for the December 31, 2020 year-end. The following information pertains to the company for 2020:

1. Amortization expense for 2020 was $18,000. CCA was correctly calculated for the tax return as $23,500.
2. The company accrued a warranty provision of $12,700 for 2020. At the end of the year, only $8,600 was actually paid out in warranty costs.
3. Accounting net income included a deduction of $5,230 for meals and entertainment.
4. Interest expense includes a deduction of $15,000 of interest paid on the building mortgage, $680 in bank charges, and $145 of interest paid to CRA for paying HST remittances late.
5. The owner, Marcus Branch, insisted on making a deduction for his trip to Toronto in the amount of $5,000. He attended a conference on new carpet technology and brought his spouse along with the trip.
6. Travel expense also includes a deduction of $190 in speeding tickets.
7. The owners son was paid wages of $12,000 for the entire year, although he quit doing his carpet cleaning assignments after three days on the job.
8. Vehicle expense includes the expenses for all working vans owned by the company, as well as a lease for the owners passenger vehicle in the amount of $925 per month. The first lease payment was on August 1, 2020.

Required: For Elephant Branch Companys 2020 taxation year, determine net income for tax purposes. If any of the above items do not affect the calculation of net income for tax purposes, please enter a description of the item and enter a 0.

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