$($Comprehensive Corporate Tax Payable$)$

Falko Ltd$.$ is a Canadian controlled private corporation with a December $31$ year end. For its year

ending December $31,2020,$ its accounting Net Income Before Taxes, as determined using gen$-$

erally accepted accounting principles, was $$1,029,700.$ Relevant information for the $2020$ year

necessary to make the appropriate reconciliation adjustments to Net Income For Tax Purposes,

Taxable Income, and federal Taxes payable is as follows.

Falko's amortization expense was $$494,500.$ Maximum deductible CCA for the year was

$$713,000.$ Company policy has always been to deduct the maximum available CCA.

The company's revenues included foreign source investment income of $C$$$44,000.$ The amount

received, however, was only $C$$$36,080$ as a result of foreign withholding income taxes of $18$

percent, or $$7,920.$ The company only recorded the amount received as revenue.

Falko sold one of its buildings that required costly renovations in favour of leasing a building.

The total sales price was $$1,725,000$ with $$500,000$ allocated to the land and $$1,225,000$ to

the building. The original cost of the land and therefore its adjusted cost base was $$650,000.$

The capital cost and adjusted cost base of the building was $$1,000,000$ and its UCC at the

time of sale was $$885,000.$ For accounting purposes the net book value of the building was

$$710,000.$ The company records accounting gains and accounting losses based on the net

book value for the building and the original cost of the land.

During the year, the company earned the following amounts of Canadian source investment

income, all of which have been included in net income for accounting purposes:

Interest On Long Term Investments

$$28,700$

Non$-$Eligible Dividends From A $100\%$ Owned Subsidiary $,77,500$

Eligible Dividends On Bank of Nova Scotia Shares

$53,300$

Falko is only associated with one company $-$ its wholly owned subsidiary Lands Inc. after

acquiring all of its shares in $2016.$ Lands received a dividend refund of $$26,475$ as a result

of the dividends paid to Falko in $2020.$ Since Lands' non$-$eligible RDTOH was insufficient

to recover all of the dividend refund it was forced to partially rely upon its eligible RDTOH.

Lands' GRIP account balance was nil at year end, preventing it from designating any of the

dividends paid to Falko as eligible. Of the dividend refund, $43$ percent was attributable to its

eligible RDTOH and $57$ percent to its non$-$eligible RDTOH.

Company expenses for accounting purposes included $(1)$ $$39,800$ spent on business meals

and entertainment; $(2)$ a write$-$down of inventory $($for obsolescence$)$ beyond that permitted

in valuing inventory for tax purposes; the excess amount is $$11,400$; $(3)$ life insurance

premiums totaling $$14,375$ paid on the life of two of the principal shareholders; and

$(4)$ bonuses to the same two shareholders for $$75,000$ each. The bonuses were never paid.

Falko's active business income for the year was $$796,400,$ which includes $$427,000$ of

Canadian manufacturing profits that qualify for the M&P deduction $($ITA $125\mathrm{.}1).$ Since the

company operates in a province that provides a special rate for M&P profits, the company

calculates the federal M&P deduction every year.

During the year ending December $31,2020,$ the company used its existing cash resources

to pay taxable dividends of $$285,000.$ It is the policy of the company to only designate divi$-$

dends as eligible to the extent they generate a dividend refund.

At December $31,2019,$ Falko had an eligible RDTOH balance of $$19,446,$ a non$-$

eligible RDTOH balance of $$73,670,$ and a GRIP balance of $$24,000.$ During $2019,$ Falko

paid taxable dividends of $$118,800,$$$18,800$ of which were designated as eligible. As a

result of paying the dividends, Falko received a dividend refund of

$($$$118,800)$ of the dividend refund $($$$18,800)(\frac{38}{1}\frac{?}{3}\%)$ was attributable to the

eligible RDTOH and the remainder of $$38,333[($$$100,000)(\frac{38}{1}\frac{?}{3}\%)]$ was attributable to

its non$-$eligible RDTOH.

The combined Adjusted Aggregate Investment Income for the two associated corp