Question 2 (10 marks) Brax Inc. is a Canadian controlled private corporation. It has a December 31 year end. The following information relates to its 2018 taxation year. At the end of 2017, the Company's Refundable Dividend Tax On Hand balance was $17,500. The 2017 dividend refund was $8,500. Brax Inc. owns 55 percent of the outstanding shares of Sax Ltd. On September 1, 2018, Sax Ltd. declared and paid a dividend of $40,500, of which Brax Inc. received $22,275 (55 percent). As a result of paying the $40,500 dividend, Sax Ltd. received a dividend refund in the amount of $11,000 Other income that was reported by Brax Inc. consisted of the following amounts: 1. 2. 3. Capital Gain (Sale Of Land) Dividends From Royal Bank Preferred Shares Interest* $19,200 3,400 1,200 *The interest is on deposits of temporary cash balances set aside for the purchase of Inventories 4. The Company's Taxable Income for the year ending December 31, 2018 was $81,000. No foreign income was included in this total. Assume the Part I Tax Payable for the year ending December 31, 2018 was correctly calculated as $18,500. Because of its association with Sax Ltd., Brax's share of the annual business limit on income eligible for the small business deduction is $25,000. Brax's active business income is equal to its share of the annual business limit. Brax Inc. paid taxable dividends of $12,000 during the year. 5. Required: For the taxation year ending December 31, 2018, determine the Part IV and refundable Part I taxes that will be payable by Brax Inc. In addition, determine the balance in the Refundable Dividend Tax On Hand account at December 31, 2018, and any dividend refund available. Show all of the calculations used to provide the required information, including those for which the result is nil Question 2 (10 marks) Brax Inc. is a Canadian controlled private corporation. It has a December 31 year end. The following information relates to its 2018 taxation year. At the end of 2017, the Company's Refundable Dividend Tax On Hand balance was $17,500. The 2017 dividend refund was $8,500. Brax Inc. owns 55 percent of the outstanding shares of Sax Ltd. On September 1, 2018, Sax Ltd. declared and paid a dividend of $40,500, of which Brax Inc. received $22,275 (55 percent). As a result of paying the $40,500 dividend, Sax Ltd. received a dividend refund in the amount of $11,000 Other income that was reported by Brax Inc. consisted of the following amounts: 1. 2. 3. Capital Gain (Sale Of Land) Dividends From Royal Bank Preferred Shares Interest* $19,200 3,400 1,200 *The interest is on deposits of temporary cash balances set aside for the purchase of Inventories 4. The Company's Taxable Income for the year ending December 31, 2018 was $81,000. No foreign income was included in this total. Assume the Part I Tax Payable for the year ending December 31, 2018 was correctly calculated as $18,500. Because of its association with Sax Ltd., Brax's share of the annual business limit on income eligible for the small business deduction is $25,000. Brax's active business income is equal to its share of the annual business limit. Brax Inc. paid taxable dividends of $12,000 during the year. 5. Required: For the taxation year ending December 31, 2018, determine the Part IV and refundable Part I taxes that will be payable by Brax Inc. In addition, determine the balance in the Refundable Dividend Tax On Hand account at December 31, 2018, and any dividend refund available. Show all of the calculations used to provide the required information, including those for which the result is nil