Ms. Batt owns all the common shares of Batter up Ltd., a Canadian-controlled private corporation, which started operations in 1987. Batter up Ltd. has been quite profitable since the early 1990s. As a result, Three-Strikes Ltd., a Canadian public corporation, has offered Ms. Batt $252,500 for the assets, excluding cash, as at December 31, 2008. The offer price reflects unrecorded goodwill of $47,500. Ms. Batt wants to wind up the company after the sale of the assets.
The pro forma balance sheet of Batterup Ltd. as at December 31, 2008, is as follows:

Additional Information:
(1) Batterup Ltd. pays corporate tax at the overall rate of 20% on active business income eligible for the small business deduction and an initial 40% rate for investment income, plus the 62/3% additional refundable tax on investment income. The corporation has a GRIP balance of nil.
(2) The reserve for doubtful accounts at December 31, 2008, was $1,500.
(3) Batterup Ltd. and Three-Strikes Ltd. elected under section 22.
REQUIRED
(A) Compute the amount available for distribution to the shareholder.
(B) Determine the components of the distribution to the shareholder.
(C) Compute the taxable capital gain or allowable capital loss on the disposition of Ms. Batt's shares on the winding-up. (Assume the adjusted cost base of Ms. Batt's common shares is $10,000.)
(D) Explain the conditions for and advantages of using a section 22 election.

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uCC FMV Assets Cas.. Accounts receivable (net nventory... Land Building.. Equipment Marketable securitie 8,750 S 7,500 15,500 45,000 11,000 35,000 S 7,500 45,000 22000 10,000 5 138,750 S 205,000 Liabilities Current liabilities Future income taxes... S 54,000 5,000 Paid-up capital Capital dividend accunt.. Retained earning. 10,000 4.000 Total liabilities and equity138.750