Monster Inc.is a Canadian-controlled private corporation located in Moncton, New Brunswick.For its fiscal year ended December 31, 2015, the corporation had correctlycalculated its income for tax purposes under Division B as follows:

Domesticsources:

Advertising agency loss $(93,000)

Dividends from non-connected taxableCanadian corporations 46,000

Interest income from five-yearbonds 77,000

Interest income on outstandingaccounts receivable in retailing business 19,000

Retail income 147,000

Profit on the sale of excess land(Note 1) 125,000

Recapture of CCA (Note 2) 10,000

Rental income (Note 3) 41,000

Retailing income 410,000

Royalty income from the sale of atrade name 42,000

Taxable capital gains net of losseson sale of short-term

marketable securities 63,000

Foreignsources:

Foreign business income in C$ (Note 4) 60,000

Foreign non-business income in C$(Note 5) 45,000

Division Bnet income for tax purposes $992,000

Notes:

(1) The land had been held for approximately twoyears. It had been held vacant in order to realize a profit on its sale at theright time.

(2) The recapture resulted from the sale of somefixtures used in the retailing business.

(3) The rental income was derived from leasingthe entire space on a five-year lease in an unused warehouse.

(4) Foreign income tax on the pre-tax foreignbusiness income of $60,000 earned through an unincorporated branch in theUnited States was paid in the amount of C$18,000.

(5) Withholding tax on the pre-tax non-businessincome of $45,000 was C$13,750.

Additional information:

(A) Monster Inc. made the following selectedpayments during the year:

Charitabledonations 52,000

Political donations 21,000

(B) Fourquarterly dividends of $35,000 were declared on the last day of each calendarquarter of 2015 and paid two weeks later. A dividend of $22,500, declared inthe last quarter of 2014, was paid in January 2015.

(C) MonsterInc.. had allocated all but $280,000 of its $500,000 business limit to otherassociated corporations. The taxable capital of the associated group was lessthan $10,000,000.

(D) The corporation has permanent establishmentsin New Brunswick and the United States. Its gross revenue and salary and wagesinformation is as follows:

Gross Revenue Salary and Wages

NewBrunswick88.5% 91.5%

UnitedStates11.5 8.5

(E) The balancesin the tax accounts on January 1, 2015 were:

Charitable donation carryforward $2,500

Unusedbusiness foreign tax credit 13,000

Non-capitallosses from 2009 46,500

Net capitallosses from 2010 22,000

Refundabledividend tax on hand 30,500

Dividendrefund for 2014 12,500

Required:

(a) Compute the federal Part I tax and provincialtax at a 12% rate on federal taxable income payable by the corporation for the 2015taxation year. Show in detail the calculation of all tax deductions, using aseparate schedule for each, as needed.

(b) Compute the refundable tax on hand balance asat December 31, 2015, showing in detail your calculation. Compute the dividendrefund for the 2015 taxation year.