Kalex Inc, a Canadian controlled private corporation, was incorporatedin 2018 and selected a December 31 taxation year end. Kalex is a family owned company with four equal shareholders,all of whom are siblings. The company employs in excess of 50 employees at its head office inToronto, a further 80 employees at its manufacturing facility in Oshawa, Ontario, and a further12 employees at its office in Syracuse, New York. The company is primarily involved in the manu-facture and sale of storage shelving and pallets. You have been asked to prepare the corporatetax returns for 2020. The company provides you with its financial statements for the year endingDecember 31, 2020. The financial statements have been prepared using Accounting Standardsfor Private Enterprises (ASPE), which represents the application of generally accepted account-ing principles. No atterpt has been made to reconcile the net accounting income with NetIncome For Tax Purposes. Through your own observations and by asking several questions youhave uncovered the following information concerning the 2020 income and expenses of Kalex:1. Net income for accounting purposes is $2,481,986 after deducting $325,000 of currentincome tax expenses.2. Other amounts either deducted or added in the determination of net income for accounting purposes are as follows:1. Bond premium amortization applied and reduced interest expenses –> $8,8002. Deducted amortization expense 615,0003. Deducted loss from employee theft (60% recovered through insurance) 4,7504. Deducted 10% of landscaping costs paid of $58,000 5,8005. Deducted pre-paid advertising for 24 months (covers May 1, 2020, to April 30, 2022) 37,200LawSocial ScienceTax law ACCT 3009

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