EXHIBIT A

Purpose
To compute the taxable income and tax payable for FFI ltd

Analysis

Net Income for tax purpose 110

Adjustments:
Depreciation 270 a
CCA -150 a
Allowance for doubtful debts 95 b
Actual Bad Debt -45 b
Professional Fees 20 c
CCA -1.5 c
Share - base consideration 25 d
Cost of sales 80 e
Salary allocated to sub 100 f
UNDERSTATED INCOME 15 g

Taxable income 518.5 Tax Payable 129.625

Notes:
a. Accounting depreciation is not deductible for tax purposes
a. CCA is deducted
b. Allowance for doubtfull receivables is not deductible for tax purpose
b. Actual Bad debt can be deducted
c. Restructing expenses which are capital in nature are not deductible
c. Patents are class 14.1 assets and are deductible
d. Stock based compensation is not deductible for tax purposes
e. Should be added onto the cost of inventory as parts have not been sold
f. Arbitrary allocation of expenses to subsidiary not allowed
g. Related parties must transact at FMV

Conclusion (Tie conclusion to Purpose)

In conclusion the taxable income and tax payable are as follows :

Taxable Income
Tax Payable
 30000
-20000
-40000
-15000
-10000