ABC Ltd. is a Canadian-controlled private corporation with head offices in Langley, British Columbia. ABC Ltd. is a wholesale company that sells manufactured aluminum eaves troughs directly to builders. It also has a construction business that installs its products (and related products) on consumers' homes. For its fiscal year ended December 31, 2021, the corporation had correctly calculated its income for tax purposes under Division B as follows:

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Canadian operating profits (Note 1) Foreign: income before tax from U.S. branch in C$ (Note 2) Royalty income (Note 3) Interest income on outstanding A/R in construction business Recapture of CCA (Note 4) Rental income (Note 5) Taxable capital gains net of allowable capital losses (active) Dividends from taxable Canadian corporations - non-connected (eligible) Division B income for tax purposes $493,000 40,000 Notes: 1. Operating profits are from its two businesses; geographic and business line details described below. Additional Information: 15,000 4,500 12,500 19,000 3,000 13,000 $600,000 2. Foreign income tax was paid in the amount of C$10,500 on this income. 3. The royalty income had been determined to be property income. 4. The recapture resulted from the sale of some equipment used in the construction business. 5. The rental income was derived from a five-year lease of the entire space of an unused warehouse owned by the corporation. Unused business foreign tax credit Refundable dividend tax on hand (non eligible) Dividend refund for 2020 (non eligible) 1. The balance in the tax accounts at the end of 2020 and other information from the 2020 taxation year were: $ 4,000 20,000 8,000 1. A net capital loss of $6,000 was realized in June 2020; no capital gains were realized by the corporation in 2020 or in the prior three years. 2. ABC Ltd. made charitable donations of $12,500 during the year. 3. Four quarterly dividends of $25,000 (non eligible) were declared at the end of each calendar quarter of 2021 and, as always, were paid two weeks after their declaration. Similarly, the dividend for the last quarter of 2020 of $22,500 (non eligible) was paid on January 14, 2021. Canadian operating profits (Note 1) Foreign: income before tax from U.S. branch in C$ (Note 2) Royalty income (Note 3) Interest income on outstanding A/R in construction business Recapture of CCA (Note 4) Rental income (Note 5) Taxable capital gains net of allowable capital losses (active) Dividends from taxable Canadian corporations - non-connected (eligible) Division B income for tax purposes $493,000 40,000 Notes: 1. Operating profits are from its two businesses; geographic and business line details described below. Additional Information: 15,000 4,500 12,500 19,000 3,000 13,000 $600,000 2. Foreign income tax was paid in the amount of C$10,500 on this income. 3. The royalty income had been determined to be property income. 4. The recapture resulted from the sale of some equipment used in the construction business. 5. The rental income was derived from a five-year lease of the entire space of an unused warehouse owned by the corporation. Unused business foreign tax credit Refundable dividend tax on hand (non eligible) Dividend refund for 2020 (non eligible) 1. The balance in the tax accounts at the end of 2020 and other information from the 2020 taxation year were: $ 4,000 20,000 8,000 1. A net capital loss of $6,000 was realized in June 2020; no capital gains were realized by the corporation in 2020 or in the prior three years. 2. ABC Ltd. made charitable donations of $12,500 during the year. 3. Four quarterly dividends of $25,000 (non eligible) were declared at the end of each calendar quarter of 2021 and, as always, were paid two weeks after their declaration. Similarly, the dividend for the last quarter of 2020 of $22,500 (non eligible) was paid on January 14, 2021.

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ABC Ltd has a taxable income of 600000 for the 2021 taxation year The corpo... View the full answer