Jones Co. (Jones) has a net income for accounting purposes before tax of $415,000
in the current year. The following items were deducted in the calculation of
accounting net income before tax:
• $10,000 of charitable donations and gifts
• $115,000 of depreciation and amortization
• $23,500 of warranty expense
• $18,000 loss on sale of equipment
As well, capital cost allowance for the year has been correctly calculated as
$108,500. The equipment was sold for $220,000 (original cost of $300,000) and at
the time of the sale, the equipment had an undepreciated capital cost (UCC) of
$209,000. Jones incurred $12,500 of actual costs related to warranty work on its
defective products sold.
Which of the following is Jones' net income for the current year?
