Assignment $1$

The controller of Above All Inc. $($AA Inc.$)$ provided you with the following selected information related to the $2023$ taxation year ended December $31,2023.$ AA Inc. is a Canadian$-$controlled private corporation. AA Inc. did not have taxable capital in excess of $$10,000,000$ in $2022.$

Canadian manufacturing profits $$451,500$

Canadian retail business income $50,000$

Taxable capital gains$($non$-$active$)4,500$

Interest income:

Canadian long$-$term bonds $40,000$

Interest on overdue accounts receivable $5,000$

Dividend income:

From taxable Canadian corporations$($eligible dividend$)$

$($AA owns less than $5\%$ of the shares of these corporations$)9,000$

From U$.$S$.$ corporations $($before U$.$S$.$ tax of $$1,800)$

$($these corporations are not foreign affiliates$)12,000$

Non capital losses from prior years applied in the calculation of taxable income $55,000$

Net capital losses from prior years applied in the calculation of taxable income $4,500$

Calculations correctly prepared under the Income Tax Act

Taxable income $$503,500$

Part I tax payable $($including additional refundable tax$)66,682$

Foreign non$-$business tax credit $1,800$

Miscellaneous Items

Refundable dividend tax on hand as of December $31,2022($non$-$eligible$)$ $$20,000$

Dividend refund received in respect of the $2022$ taxation year $($non$-$eligible$)9,000$

Taxable dividends paid during $2023($non$-$eligible$)120,000$

Required:

Assume that the current year$$s passive income is equal to the prior year$$s passive income.

Determine, for AA Inc., by clearly presenting all component parts and their calculations,

$($a$)$ the amount of the small business deduction, and

$($b$)$ the amount of the dividend refund for $2023.$

Do not re$-$compute the Part I tax and the other related tax credits. Assume that they have been computed correctly.

NOTE: PLEASE ANSWER USING EXCEL ONLY. SHOW ALL CALCULATIONS AND FORMULAS USED IN EXCEL TO GET TO THE FINAL ANSWER. ATTACH SCREENSHOT ONCE THE ANSWER IS COMPLETED. THANK YOU.