Financial statements for Greyon Inc. 

Financial statements for Greyon Inc.

Question Description:Greyon Inc. operates an active business. Financial statements for the year ended December 31, 2020 report a net income before taxes of $300,000. The following additional information is provided: 1. Greyon’s net income is summarized as follows: Income from business operations $338,800 Gain on sale of capital assets 18,200 Interest on a bond investment 6,100 Income from Financial Statements $363,100 2. During the year Greyon completed construction of a new warehouse building and its cost of $600,000 was added to the balance sheet. The cost consists of the following: Building construction $605,000 Heating and cooling systems 96,800 Landscaping of grounds 24,200 $726,000 3. Legal expenses include $2,400 for drafting the mortgage document for the new warehouse, $1,200 to investigate a zoning limitation on the new warehouse site, and $6,100 for the audit fee. 4. The balance sheet of Greyon includes an amount for goodwill acquired from a previous business acquisition. During the year, a goodwill impairment loss of $36,300 as deducted from the income from business operations. 5. A management bonus of $72,600 was announced and accrued in September. The bonus was paid in two equal installments on January 31 and April 30 of the following year, 2021. 6. The income statement for the year ended December 31, 2020 includes the following items: Amortization $49,600 Charitable donations 7,300 Volume rebates and discounts on purchases 15,700 Architect’s fee for design of new warehouse building 30,300 7. Advertising and promotion includes $24,200 for airing a TV commercial, $36,300 for production of the TV commercial, $6,100 for club memberships in a sports-related facility to enhance business contacts and $14,500 for acquiring a permanent mailing list for seeking new customers. 8. Capital cost allowance has been correctly calculated as $70,200. from the given case on Financial statements for Greyon Inc. you are required: 1. Determine Greyon’s Net Income from Business for tax purposes for the 2020 taxation year. 2. Determine Greyon’s Net Income for Tax Purposes for the 2020 taxation year.

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