Lockwood Inc. manufactures and sells various automotive

Lockwood Inc. manufactures and sells various automotive parts. Lockwood’s accounting net income before tax for the year ended December 31, Year 7, is $438,000. The following additional information has been provided for Year 7:

The capital cost allowance (CCA) claim is equal to depreciation expense deducted in determining accounting net income.

 Charitable donations total $21,500.

Golf club membership dues for management employees equal $13,450 to generate additional business opportunities.

Dividends received equal $15,600 from its Canadian subsidiary company and an additional $6,200 in dividends on portfolio investments in U.S. corporations. Lockwood does not own more than 4% of the shares issued and outstanding of any of the U.S. corporations that paid dividends.

Which of the following are the correct amounts for Lockwood’s net income for tax purposes and taxable income for Year 7?

a) Net income for tax purposes of $451,450; taxable income of $435,850

b) Net income for tax purposes of $466,225; taxable income of $429,125

c) Net income for tax purposes of $472,950; taxable income of $429,650

d) Net income for tax purposes of $472,950; taxable income of $435,850