Falko Ltd. is a CCPC with a calendar-based taxation year end. For its 2022 taxation year ending December 31, 2022, its accounting net income before taxes, as determined using generally accepted accounting principles (ASPE), was $1,029,700. Relevant information for the 2022 taxa-tion year necessary to make the appropriate reconciliation adjustments to net income for tax pur-poses, taxable income, and federal income tax payable is as follows:

1. Falkos amortization expense was $494,500. Maximum deductible CCA for the year was $713,000. Company policy has always been to claim the maximum available CCA.

2. The companys 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%, or $7,920. The company only recorded the amount received as revenue.

3. 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 ACB was $650,000. The capital cost and ACB of the building was $1,000,000 and its UCC at the time of sale was $885,000. For accounting purposes, the carrying value of the building was $710,000. The company records accounting gains and accounting losses based on the carrying value for the building and the original cost of the land.

4. During the year, the company earned the following amounts of Canadian 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

5. Falko is only associated with one companyits wholly owned subsidiary Lands Inc., after purchasing all of its shares in 2018. Lands received a dividend refund of $26,475 as a result of the taxable dividends paid to Falko in 2022. Since Lands non-eligible RDTOH was insufficient to recover all of the dividend refund, it was forced to partially rely on 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% was attributable to its eligible RDTOH and 57% to its non-eligible RDTOH.

6. 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 income 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.

7. Falkos 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 125.1). 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.

8. In 2022, the company used its existing cash resources to pay taxable dividends of $285,000. It is the policy of the company to only designate dividends as eligible to the extent they generate a dividend refund.

9. At December 31, 2021, Falko had an eligible RDTOH balance of $19,446, a non-eligible RDTOH balance of $73,670, and a GRIP account balance of $24,000. In 2021, 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 $45,540 [(38 1/3%)($118,800)]; $7,207 of the dividend refund [($18,800)(38 1/3%)] was attributable to the eligible RDTOH and the remainder of $38,333 [($100,000)(38 1/3%)] was attributable to its non-eligible RDTOH.

10. The combined AAII for the two associated corporations for the 2021 taxation year is $47,190 and will be $62,770 for 2022. The TCEC of the two associated corporations totals $6,445,000 for the 2021 taxation year and will equal $10,960,000 for 2022.

11. Falko has a 2018 non-capital loss balance of $112,000 and a 2020 net capital loss balance of $16,930. Falkos management has indicated that they wish to deduct the maximum amount of these losses possible for the 2022 taxation year.

12. Falko and its wholly owned subsidiary Lands have agreed to split the annual small business limit 50-50 for the 2022 taxation year.

Required: Show all of the calculations used to provide the following required information, including those for which the result is nil.

A. Calculate Falkos minimum 2022 net income and taxable income.

B. Assume the foreign non-business tax credit is equal to the foreign tax withheld. Calculate Falkos Part I tax payable for the 2022 taxation year. As the corporation operates in a province that has a reduced rate for M&P activity, a separate calculation of the federal M&P deduction is required.

C. Calculate the refundable portion of Falkos Part I tax payable for 2022

D. Calculate Falkos 2022 Part IV tax.

E. Determine the December 31, 2022, balance in Falkos GRIP account.

F. Determine the December 31, 2022, balances in Falkos eligible RDTOH and the non-eligible RDTOH.

G. Calculate Falkos dividend refund for the 2022 taxation year, showing separately the amount attributable to eligible dividends and the amount attributable to non-eligible dividends.