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Carla Armitage owns 100% of the common shares of Extra Ltd., a Canadian-controlled private corporation operating a wholesale business in eastern Canada. Extra's fiscal year-end

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Carla Armitage owns 100% of the common shares of Extra Ltd., a Canadian-controlled private corporation operating a wholesale business in eastern Canada. Extra's fiscal year-end is May 31, 2022. It is now April 15, 2022, and Carla has just signed a letter of intent to sell the wholesale business to Q Ltd. The initial discussions involved the sale of specific assets of Extra, but a sale of the shares of the company may also be considered. Carla has requested your assistance in estimating the tax liability to Extra if the business assets are sold. Information relating to the sale and to the current year's operating income is provided below. 1. The balance sheet of Extra at May 31, 2022, is estimated as follows: 2. Net income before income tax and net gains from the sale of assets for the year ended May 31, 2022, are estimated as follows: The following additional information relates to the net income: - The dividend income is eligible dividends received from a Canadian public corporation, the shares of which were sold during the year for proceeds equal to their original cost. - Expenses deducted from revenues included the following items: 3. The 2021 income tax return indicates the following tax account balances: 4. The letter of intent regarding the sale of the business indicates that the closing date will be May 31, 2022. The letter included the following list of assets to be sold, together with each asset's estimated market value. For information, the original cost of each asset is provided in the chart below. Payment for the above assets would consist of cash plus the assumption of Extra's liabilities. 5. You have suggested to Carla that she consider selling the common shares' of Extra, rather than the specific assets. You have estimated the market value of the shares to be $915,000. The shares were acquired in 2014 for a cost of $106,000. In previous years, Carla had used the capital gain deduction to exempt from tax $126,000 of gains. Her cumulative net investment loss (CNIL) at the end of 2021 is estimated to be $43,000. Required: 1. Determine the active business income, aggregate investment income, increase to the capital dividend account, and increase to the non-eligible refundable dividend tax on hand resulting from the sale of the assets. (If an item is not relevant, leave it blank.) Non-eligible ROTOH 2. Disregard the amounts calculated in Part 1 and assume new information has come to light and that you have correctly updated your calculations to the following: All other information is unchanged. Determine the net income for tax purposes and taxable income. (Enter reductions as negative amounts with a minus (-) sign.) 3. Disregard the amounts you calculated in Part 2 and assume that the net income for tax purposes was 860,000 and the taxable income was 854,800 . The amounts listed in Part 2 resulting from the asset sale are unchanged. Determine the total actlve business income from all sources. (Enter reductions as negative amounts with a minus () sign.) 4. Disregard the active business income calculated in Part 3 and assume it was actually 665,500 . Also assume that the net income for tax purposes is still 860,000 and the taxable income is still 854,800 . Determine the Part I tax, Part IV tax, and dividend refund. Enter reductions as negative amounts with a minus () sign. If an amount is zero, enter " 0 ". Use 0.3833 when multiplying to represent 381/3%. Use 0.3067 when multiplying to represent 302/3%, (Do not multiply by more than 4 decimal places and round your final answer to the nearest dollar.) Small business deduction (SBD) 19% least of (i) (ii) (iii) (a) General tax reduction - 13% of Less: Less: Additional refundable tax on investment income 102/3% times the loast of: PART I TAX Part IV Tax Non-eligible RDTOH Less: Add: Add: refundable Part I tax - least of: (i) (i) (ii) 5. If Carla decides to sell the shares of Extra, what amount will be added to her net income for tax purposes in her 2022 taxation year? If Carla decides to sell the shares of Extra, what amount will be added to her net income for tax purposes in her 2022 taxation year

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