ABC Ltd. (ABC) is a Canadian-controlled private corporation (CCPC) with all of its operations located in Ontario. ABC has a Taxable income of $450,000, all of which is active business income. Using the formula from the Income Tax Regulations, it has been determined that $300,000 of the business income results from manufacturing and processing activity.

ABC Ltd. is associated with another CCPC. The two companies have agreed that ABC will claim $160,000 of the annual business limit and another CCPC will claim the remainder.

Assume that no grinds are applicable to ABC’s business limit.

Required: 

Determine the Part I federal Tax Payable for ABC Ltd. for the year ending December 31, 2021.

Show full calculations in Excel, whether or not they are necessary to the final solution. As the corporation operates in a province that has a reduced tax rate for M&P activity, a separate calculation of the federal M&P deduction is required