KM Ltd.is a Canadian-controlled private corporation,operating a small gift store in Vancouver.The company has a December 31^st year-end.KM's financial statements reported net income before taxes of $210,000 in 20x0.
Financial information relating to 20x0 is as follows:
Land adjacent to the gift shop was purchased with a $75,000 bank loan during the year to allow for an outdoor sales area during warm weather.Interest expense on the loan for the year was $9,600,and the appraisal fee to finance the loan was $1,000.Both the interest and the appraisal fee were expensed by KM in 20x0.
The company hired a contractor to landscape the land.The $5,000 bill for the landscaping was paid in full during the year and capitalized on KM's Balance Sheet.
During the year,a new display case worth $2,000 was purchased and expensed on the books.
Amortization expense of $21,000 was deducted during the year.Total CCA (following any adjustments)for the year was $16,000,and is not reflected in the financial statements.
The following were also expensed during the year:

KM Ltd.is a Canadian-controlled private corporation,operating a small gift store in Vancouver.The company has a December 31<sup>st</sup> year-end.KM's financial statements reported net income before taxes of $210,000 in 20x0. Financial information relating to 20x0 is as follows: Land adjacent to the gift shop was purchased with a $75,000 bank loan during the year to allow for an outdoor sales area during warm weather.Interest expense on the loan for the year was $9,600,and the appraisal fee to finance the loan was $1,000.Both the interest and the appraisal fee were expensed by KM in 20x0. The company hired a contractor to landscape the land.The $5,000 bill for the landscaping was paid in full during the year and capitalized on KM's Balance Sheet. During the year,a new display case worth $2,000 was purchased and expensed on the books. Amortization expense of $21,000 was deducted during the year.Total CCA (following any adjustments)for the year was $16,000,and is not reflected in the financial statements. The following were also expensed during the year: On December 30<sup>th</sup>,KM's president announced a bonus to be paid to the company's key employee in the amount of $5,000,which was expensed in the books that day.The employee will receive the bonus in 20x1 in equal payments of $2,500,to be issued on January 30<sup>th</sup> and July 30<sup>th</sup>. Required: Determine KM Ltd.'s net income for tax purposes for 20x0.

On December 30^th,KM's president announced a bonus to be paid to the company's key employee in the amount of $5,000,which was expensed in the books that day.The employee will receive the bonus in 20x1 in equal payments of $2,500,to be issued on January 30^th and July 30^th.
Required:
Determine KM Ltd.'s net income for tax purposes for 20x0.

Determine Whether the Transactions Concerning the Following Assets (Shown in Italics)would

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