Darby Inc. has just completed its fiscal year ended December 31, 2017. Using GAAP, the accountant has determined that, for that taxation year, the Company has experienced a Net Loss Before Taxes and Amortization Expense of $113,000. The accountant provides the following information that was used in the determination of the Net Loss for accounting purposes:
1. The Company was forced to pay damages of $12,300 for failure to perform a service contract. The amount was paid when the client threatened to bring action for breach of contract. The $12,300 was expensed in the current year.
2. The Company’s property tax expense of $19,500 includes an amount of $1,100 that was paid to a regional municipality in which the Company maintains a fishing lodge for its employees.
3. The Company’s expenses include contributions to registered charities of $13,700.
4. The Company’s expenses include costs of new landscaping at their administration building in the amount of $9,800.
5. The Company deducted a loss of $10,100 resulting from a theft by one of its clerical employees.
6. Effective December 31, 2017, as the result of a change in its distribution system, the Company was forced to cancel a tenant’s lease that would have been in force until January 1, 2025. During the 2017 taxation year, the Company agreed to pay, and deducted damages in the amount of $17,000. On December 31, 2017, $5,000 of this amount had not been paid.
7. The current salary expense included a bonus payable to the Company’s president in the amount of $14,500. It will be paid on February 1, 2018.
8. The insurance expense included the premium on a whole life policy on the life of the president’s wife in the amount of $9,500. This was not a group life policy and the proceeds were payable to the Company.
9. As the Company changed property and casualty insurers during the year, all of its assets had to be appraised. The cost of this appraisal was $4,150, with the entire amount being expensed in the year.
10. The Company’s wage expense included $51,000 in management bonuses (other than that of the president described in item 7) that will not be paid until May 1, 2018. In addition, $34,000 in bonuses, which were deducted for both tax and accounting purposes in 2016, were paid in March, 2017.
11. Bad debt expense amounted to $11,000.
12. Renovation costs in the amount of $153,000 were charged to expense during the year. This amount resulted from the need to completely renovate one of the Company’s offices and involved the installation of plumbing and air conditioning systems, as well as rewiring and installation of new concrete foundations.
13. The president and his wife attended a convention that resulted in $5,200 in travel expenses for the Company. Of this amount, $1,900 related to the fact that the president’s wife chose to accompany him on this trip.
14. The Company’s interest expense included bond discount amortization in the amount of $950.
15. The Company’s legal expenses for the year amount to $10,500 and were related to the following transactions:
Defense of breach of contract (see item 1) $2,450
Cost of amending articles of incorporation 3,600
Defense costs related to income tax reassessment 4,450
16. The Company’s expenses included a total amount of $12,500 for business meals and entertainment.
17. The Company’s calculations for CCA and Cumulative Eligible Capital write-offs have not yet been completed.
Based on the foregoing information, Compute the