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1. Polytech Inc. calculated its Net Income for its Dec. 31st, 2019, year-end as follows:

Revenues $1,000,000

Other income 100,000 A

Expenses:

Cost Of Goods Sold ($300,000) B

Selling And Administrative Costs ( 150,000) C

Amortization Expense ( 175,000) D

Other Expenses ( 125,000) (750,000) E

Income Before Tax Expense $350,000

Income Tax Expense: (75,000)

Net Income $275,000

Other Information:

1. Other income consists of a capital gain.

2. Cost of Goods Sold includes:

$ 15,000 in lower of cost or market adjustment

3. Selling and Administrative Costs includes:

$ 30,000 in club memberships for senior management

$ 1,000 in interest on late tax installments

• 4. Polytech Inc. amortizes the following assets:
• Building, 95% manufacturing use, 5% office use, with an ACB of $1.5 million and a UCC of $1.2 million on Jan. 1, 2019.
• Warehouse leased in 2014 for a 10-year term with an option for two 5-year renewals. Leaseholds improvements were made in 2014 for $100,000 and 2016 for $40,000.
• Manufacturing equipment (class 8) with a cost of $200,000 and a UCC on Jan. 1^st, 2019, of $140,000. In December the company sold equipment for $500,000 which was originally purchased for $400,000. Replacement equipment was also purchased in December for $650,000.

5. Other Expenses include:

$ 4,000 in 2019 year-end bonuses, paid on July 1^st, 2020

$ 2,000 in bond amortization

$ 4,000 in incorporation costs

1. Calculate minimum Net Income For Tax Purposes for the year ended Dec. 31, 2019;
2. End of year tax account balances; and,

Explain adjustments to GAAP income and any amounts that are unadjusted.

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