Lardon Inc. is a CCPC throughout the year ending December 31, 2020. Lardon is not associated with any other company. For 2020, the Company has Net Income For Tax Purposes of $632,000, an amount that includes $553,000 in manufacturing and processing profits (as per ITR 5200). The Company's Net Income For Tax Purposes also includes foreign source business income of $40,000 and taxable capital gains of $39,000. The jurisdiction in which the foreign business income was earned withheld an amount that will result in Lardon being entitled to a foreign tax credit of $6,000. The Company's only deduction in calculating Taxable Income is a donation to a registered charity of $187,000.
Due to rumours of illegal activities, just prior to year end, Lardon lost two major customers and many of its key staff.
Determine the amount of Lardon's small business deduction and M&P deduction for the year ending December 31, 2020, assuming that the Company deducts all of the $187,000 of charitable donations. Do you believe that deducting all of the donations is the best alternative for Lardon? Explain your conclusion.

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The Answer of Lardon Inc. is a CCPC throughout the year ending December 31, 2020. Lardon is not associated with any other company. For 2020, the Company has Net Income For Tax Purposes of $632,000, an amount that includes $553,000 in manufacturing and processing profits (as per ITR 5200). The Company's Net Income For Tax Purposes also includes foreign source business income of $40,000 and taxable capital gains of $39,000. The jurisdiction in which the foreign business income was earned withheld an amount that will result in Lardon being entitled to a foreign tax credit of $6,000. The Company's only deduction in calculating Taxable Income is a donation to a registered charity of $187,000.
Due to rumours of illegal activities, just prior to year end, Lardon lost two major customers and many of its key staff.
Determine the amount of Lardon's small business deduction and M&P deduction for the year ending December 31, 2020, assuming that the Company deducts all of the $187,000 of charitable donations. Do you believe that deducting all of the donations is the best alternative for Lardon? Explain your conclusion.