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For the year ended August $31,2022,$ Zefer Ltd$.,$ a Canadian$-$controlled private corporation, reported a net income before income taxes

of $$551,700.$ The statement of income is summarized as follows:

Income from operations

Other income:

Interest

Net gain on sale of assets

Net Income per Financial Statements

$$459,800$

$[6,100],[85,800],[$$$551,700]$

The net gain on the sale of assets consists of the following amounts:

Gain on sale of franchise $-$$$30,000$

The franchise to operate a retail store was acquired seven years previously at a cost of $$110,000.$ It was sold in $2022$ for $$155,000.$ The

sale proceeds included a cash down payment of $$20,000,$ with the balance payable in six annual instalments of $$20,000$ plus interest

beginning in $2023.$ The franchise, which qualified as a class $14$ asset, had an undepreciated capital cost of $$111,300$ at the time of the

sale and was the only asset in its class.

Gain on sale of warehouse property $-$$$80,000$

In July $2022,$ a warehouse property was sold for cash proceeds of $$430,000($land $-$ $$180,000$; building $-$ $$250,000).$ The property had

an original cost of $$370,000($land $-$ $$60,000$; building $-$ $$310,000).$ The building, which was the only asset in Class $1,$ had an

undepreciated capital cost of $$290,000.$ After the sale of the warehouse, temporary premises were leased until a new, larger

warehouse was constructed. New land was purchased in January $2023$ for $$200,000.$ Construction of the new warehouse would be

completed by July $2023.$

Loss on sale of shares of subsidiary $-$$$24,200$

Zefer sold shares of a subsidiary corporation for cash proceeds of $$544,500.$ The shares were acquired five years ago for $$568,700.$

Legal fees of $$2,400$ were paid to draw up the sale agreement and were charged to the legal expense account.

Required:

Calculate Zefer's net income for tax purposes for the $2022$ taxation year.$$465,900$

Paragraph $3($b$)$ Capital gains & capital losses

Franchise Taxable capital gain

Taxable capital gain on sale of land

Allowable capital loss on shares

Net Income for tax purposes

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