RadionFaux Industries Ltd. (RIL) is a Canadian controlled private corporation, located at 123 ABC Street in Ottawa, Ontario K4E 1A1. Its Ontario corporation tax account number is 1234567. Its phone number is (613) 111-1111. It was incorporated on February 24, 1990, in Ottawa. The government's Crown Copyright no longer permits us to use fake Business Numbers in soft- ware problems. To reduce the number of ProFile's error messages because of this, enter NR (for not registered) in the Business Number field. The company has 1,000 shares of common stock issued and outstanding, all of which are held by Ms. Margaret Ottawa (SIN 527-000-301). Ms. Ottawa, the president and director of the company, is the person who should be contacted with respect to matters concerning the company's books and records. She is the authorized person as well as the signing officer. RIL is a retailer of pet supplies. All of its sales occur within Canada. It has net assets of $235,000 on December 31, 2019. This includes a few investments that Ms. Ottawa inherited from her father two years earlier. RIL owns all of the 500 common shares of OttawaFaux Inc., which holds most of the invest- ments Ms. Ottawa inherited from her father. The common shares have a book value of $1,200,000. OttawaFaux Inc. has the same location and phone number as RadionFaux Indus- Ptries Ltd. OttawaFaux Inc. has a December 31 fiscal year end. Enter NR (for not registered) in the Business Number field for OttawaFaux Inc. OttawaFaux Inc. is also involved in earning active business income through the breeding and sale of championship dogs. It has total $200,000. Its Taxable Capital Employed In $365,000 as at December 31, 2019. The following information applied to RIL: of $2,000,000 and total revenues for 2019 of da was $350,000 as at December 31, 2018, and Taxable Capital Employed In Canada - 2018 Taxable Capital Employed In Canada - 2019 Total Assets As At December 31, 2019 RDTOH As At December 31, 2018 Dividends Declared And Paid During 2018 GRIP Balance As At December 31, 2018 Capital Dividend Account As At December 31, 2018 $328,000 411,000 750,000 5,200 Nil 11,750 6,000 RIL does not use International Financial Reporting Standards (IFRS). For the taxation year ending December 31, 2019, RIL's Income Statement, before any deduction for income taxes, was as follows: a Sales Revenues Sch 7 Interest On Long Term Debt $580,000 27,500 Interest Received On Foreign Bank Account (Note 1) Eligible Dividends On Royal Bank Shares 18,000 17,500 Non-Eligible Dividends From OttawaFaux Inc. (Note 2) 42,000 sch | Gain On Sale Of Shares (Note 3) 27,000 Total Revenues $712,000 $208,000 122,000 147,000 $477,000 $235,000 Cost Of Goods Sold Amortization Expense Other Operating Expenses Total Expenses (Excluding Taxes) Net Income (Before Taxes) Note 1 This interest is net of $2,000 in taxes withheld in Ireland. Note 2 As a result of paying this $42,000 in dividends to RIL, OttawaFaux Inc. received a dividend refund of $14,000. Note 3 On March 23, 2019, RIL sold 2,700 shares of Canadian Imperial Bank of Commerce. The common shares had cost $118,800 on June 6, 2016, and were sold for net proceeds of $145,800. Other Information: 1. Expenses include a deduction for charitable donations to the Ottawa Civic Hospital in the amount of $5,000. 2. RIL's expenses include penalties of $3,500 resulting from a judgment in the Tax Court of Canada. 3. RIL reimbursed Ms. Ottawa $34,000 for business meals and entertainment for clients and suppliers during the year. 4. During the year, RIL incurred $20,000 in landscaping costs. For accounting purposes these are being treated as a capital asset, to be amortized using the straight-line method over 10 years. The related amortization is included in the Amortization Expense shown on the ine B due to Income Statement. 5. The opening UCC balances were $246,000 for Class 1, $135,000 for Class 8, and $90,000 for Class 10. The only fixed asset disposition during the year was the sale of a delivery truck. The truck had cost $35,000 and was sold for its net book value of $12,000. The only fixed asset acquisition was $52,000 in office furniture on April 1, 2019. 6. During 2019, RIL paid taxable dividends of $92,000. Of these dividends, $25,000 were des- ignated as eligible. On September 1, 2019, RIL also elects to pay the maximum capital dividend allowable. Focus 7. RIL allocates $60,000 of the annual business limit to OttawaFaux Inc. This is $5,000 more than OttawaFaux Inc. can utilize in 2019, but RIL cannot use the excess. B. RIL paid quarterly income tax instalments of $8,000 each on the 20th of March, June, Sep- tember, and December during 2019. 9. RIL has a website describing the products it carries, but no income is generated from the website. 10. Assume that the adjusted aggregate investment income (AAI) of both companies is nil in the 2018 preceding year. Required: Prepare the federal corporate tax return for RIL for the 2019 taxation year using the ProFile T2 corporate software program. Determine the eligible and non-eligible RDTOH and comment on whether the designation of $25,000 of eligible dividends was a good idea. If not indicate the designation that you would have made. On the ProFile schedule titled "Info, the Filing question "Complete return from GIFI?" is answered Yes by default, click No. Ignore the GIFI requirements except as follows: On GIFI Schedule 125: Input the total revenues less the Gain On Sale Of Shares ($685,000) on the line "Total Sales Of Goods And Services" (Code 8000). Choose "Realized gains / losses on sale of investments" (Code 8211) from the drop down menu under Code 8089 and input the Gain On Sale Of Shares. Choose "Purchases/ cost of materials" (Code 8320) from the drop down menu under Cost of Sales and input the Cost of Goods Sold. Choose "Amortization of tangible assets" (Code 8670) from the drop down menu under Operating Expenses and input the amortization expense. Choose "Other expenses" (Code 9270) from the drop down menu under Operating Expenses and Other Operating Expenses. On GIFI Schedule 100: Input the Net Income figure as "Cash and deposits" (Code 1000) in order to make the total assets equal to the total liabilities and equity. Although this will not properly complete the GIFI statements, it will eliminate the warning mes- sages that would otherwise be generated when the Net Income figure and Amortization Expense are input on Schedule 1. These GIFI entries will have no effect on the calculations in the tax return. In addition, to prevent audit warnings, $141, "Notes Checklist, has to be completed. Assume there are no notes to the financial statements and answer "No" to any other relevant questions. OF