FMT1 Problem: Business Income - Bat Company

 Bat Co. provides you the following accounting information for its June 30, 20x9 taxation year. Revenues $3,000,000 Direct expenses (1,770,000) Gross margin 1,230,000 Depreciation expense 850,000 Club dues 20,000 Meals and entertainment 60,000 (930,000) Write-down of investments (500,000) Net Loss for Accounting Purposes ($200,000) Additional information:  Capital cost allowance (i.e., depreciation for tax purposes) is $800,000 for the year.  Management decided to write-down the value of investments in subsidiaries. There was no actual disposition of the investments. Required: Compute net income for tax purposes