Nora engaged you to assist her in determining NDDL$\text{'}$s $2023$ corporate tax payable$/($refundable$)$ and provide advice on certain other tax matters. Her business activity can be found in Exhibit $1($attached$).$ NDDL recently received several similar contract opportunities in Mexico and will begin work on those in early $2024.$ Nora is excited about growing her business over the next five years and may need to live in Mexico to complete the longer$-$term contracts; however, she plans to retire in Canada after the five years and wonders what options are available to her as a shareholder and NDDL$.$

Using the legislation in place as at April $21,2023,$ perform the required:

calculate Nyall Digital Design Ltd$\text{'}$s $($NDDL$)$ minimum net income for tax purposes and minimum taxable income for the $2023$ taxation year.

Based on your answer to part $($a$),$ calculate the projected minimum Part I and Part IV federal income tax, refundable dividend tax on hand $($RDTOH$),$ and dividend refund for the $2023$ taxation year.

Prepare any specifically requested summaries from your client.

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NDDL$\text{'}$s income for accounting purposes for $2023$ is summarized as follows:

Income from consulting operations

$ $221,000$

Loss on sale of assets

$(15,000)$

Dividend income $$ BIS Ltd$.$

$3,000$

$ $209,000$

Dividend income of $$3,000$ is from BIS Ltd$.,$ a CCPC$.$ NDDL owns an $8\%$ share of BIS. For its year ended December $31,2023,$ BIS earned $$100,000$ of active business income and applied the small business deduction to all this income. Of the $$3,000$ dividend, $$2,000$ was designated as a capital dividend from BIS's capital dividend account. BIS's NERDTOH balance was $$5,000$ at the time of the dividend.

A review of NDDL$\text{'}$s December $31,2022,$ corporate tax return provides the following information:

Capital dividend account $ $20,000$

Non$-$capital loss $5,000$

NERDTOH $5,000$

Undepreciated capital cost $($UCC$)[1]$:

Class $1$

$$250,000$

Class $8-$ includes display fixtures only

$20,000$

Class $10\mathrm{.}1$

$18,000$

Class $14$

$85,000$

Class $50$

$8,700$

In December $2023,$ NDDL sold its only building for $$590,000($land $$240,000$; building

$$350,000)$ and leased a new facility. NDDL acquired this building in January $2023$ at a cost of $$400,000($land $$100,000$; building $$300,000).$ NDDL immediately spent $$20,000$ for leasehold improvements in the new facility. The lease is for three years with two $5-$year renewable options.

In December $2023,$ NDDL sold all its display fixtures for $$15,000($original cost $$30,000).$ New fixtures were temporarily lent by a supplier.

On June $1,2023,$ NDDL sold an automobile for $$20,000.$ The vehicle was purchased in January $2023$ for $$45,000.$ On the same day, the company leased a new automobile for Nora, to be used for company business. Total lease payments in $2023$ were $$8,400.$

On August $1,2023,$ NDDL purchased a new computer system costing $$35,000.$ This cost included $$5,000$ for computer software. The old computers, which originally cost $$15,000,$ were sold for $$6,000.$

NDDL paid a life insurance premium of $$1,000$ on Nora's life. This life insurance policy is held as collateral for a bank loan.

During the year, NDDL expensed $$5,500$ by creating an estimated warranty reserve of $$3,500$ and a reasonable bad debt reserve of $$2,000.$

NDDL spent $$10,000$ for website development. It is estimated that this website will need to be redesigned after two years. The company charged amortization costs of $$3,000$ to the income statement and the remaining amount was capitalized and added to the balance sheet for future amortization.

Travel expenses included $$3,000$ for Nora's assistant's airline tickets. This amount included $$500$ for a ticket for his spouse, who accompanied him during one of the business trips. He was also given a car allowance of $$0\mathrm{.}65$ per kilometre to cover the cost of using his own car. During the year, the assistant travelled $12,000$ kilometres for business purposes.

Legal and audit expenses included $$5,000$ for drafting the sale agreement for the assets sold, $$2,000$ for the accounting fee, and $$500$ for preparing minutes for directors' and shareholders' meetings.

Depreciation expenses was $$17,000.$

On December $31,2023,$ NDDL paid a dividend of $$50,000$ to Nora. She heard that there are many transactions that alter the balance in the capital dividend account $($CDA$)$ of a CCPC and wondered if this dividend was impacted by them. Explai