Manitoba Traders Ltd. is a Canadian-controlled private corporation located in Winnipeg, Manitoba. For its fiscal year ended December 31, 2020, the corporation had correctly calculated its income for tax purposes under Division B as follows:

Operating income (Note 1)$ 387,000

Profit on the sale of excess land (Note 2)200,000

Foreign business income in Cdn$ (Note 3)105,000

Royalty income 15,000

Retailing income210,000

Interest on o/s accounts receivable in retailing business14,500

Recapture of CCA (Note 4)30,500

Advertising agency loss(53,500)

Rental income (Note 5)36,500

Taxable capital gains net of losses (from active assets)63,000

Interest income from five-year bonds 10,000

Div from non-connected taxable Canadian corporations(eligible)9,000

Foreign non-business income in Cdn$ (Note 6)25,000

Division B net income for tax purposes$ 1,052.000

Notes:

(1)This amount of operating income was computed correctly under Division B. The corporation has permanent establishments in Manitoba and North Dakota in the United States. Its gross revenue and salary and wages information is as follows:

ManitobaNorth Dakota

Gross revenue $10,325,000$3,675,000

Salaries and wages5,375,000993,000

(2)The land had been held for approximately three years. It had been held vacant in order to realize a profit on its sale at the right time. The corporation has bought and sold land for a profit several times in the few years.

(3)Withholding tax on the foreign business income was C$14,000 which represents the foreign tax credit available to the corporation

(4)The recapture resulted from the sale of some fixtures used in the retailing business.

(5)The rental income was determined to be property income.

(6)Withholding tax on the foreign non-business income was C$5,000 which represents the foreign tax credit available to the corporation

Additional information:

(a)Manitoba Traders Ltd. made the following selected payment during the year:

Charitable donations$28,000

(b)Four quarterly dividends (non-eligible) of $45,000 were declared at the end of each calendar quarter of 2020 and paid within two weeks of their declaration. The last quarter of 2020 was paid in January 2021 and a dividend (non-eligible) of $30,000 declared in the last quarter of 2019 was paid in January 2020.

(c)Manitoba Traders Ltd. had allocated $150,000 of its business limit to other associated corporations. Taxable capital of the associated group for large corporations tax purposes was $8,000,000.

(d)The balance in the tax accounts on January 1, 2020 were:

Non-capital losses from 2014 46,500

Net capital losses from 201514,500

Refundable dividend tax on hand (non-eligible)20,000

Refundable dividend tax on hand (eligible)NIL

Dividend refund for 2019 (non-eligible)18,000

GRIP balance at the end of 2019NIL

Required:

(A)Compute federal Part I tax payable for 2020. Show in detail the calculation of all tax deductions in the computation.

(B)Compute the refundable tax on hand balance as at December 31, 2020, showing in detail your calculation and compute the dividend refund for 2020.

(C)Compute the corporations GRIP balance at December 31, 2020