Running Free Enterprises Ltd$.$ has been operting for many years in Canada and the USA. Running Free Enterprises

Ltd$.$ is a Canadian Controlled Private Corporation in which Tommy Jones is the sole shareholder. The following

income for the fiscal year ended December $31,2021$ has been provided:

$2021$ Canadian Sourced Income:

Engineering Consulting Income $$184,000$

Net Retail Income $($Loss$)($$$5,000)$

Taxable Capital Gains $$5,000$

Allowable Capital Losses $($$$2,000)$

Eligible Dividends from Beaver Corp $($Note #$1)$ $$5,900$

Non$-$Eligible Dividends from Lion Ltd $($Note #$1)$ $$8,000$

Interest income from Long Term Investments $$6,000$

Foreign Sourced Income: Before Withholdings Net of Withholding $ Withheld

US Interest Income $$7,500$ $$6,375$ $$1,125$

US Business Income $$14,600$ $$12,410$ $$2,190$

No Carryover of Foreign Business Tax Credits

US amounts above are in Canadian DollarsNote #$1$: $5\%$

$70\%$

Lion Ltd received a dividend refund from the NERDTOH of: $$4,381$

Additional Information:

Charitable Donations made during year $$13,000$

Non$-$Eligible Taxable Dividends Paid to Shareholder of Running Free Enterprises Ltd$.*$ $$23,000$

Income Tax Installments $$20,000$

$*-$ The only shareholder of Runing Free Enterparises Ltd is Tommy Jones $($Individual$)100\%$ shareholder

Balances of Loss Pools and other accounts from $2020$:

ERDTOH $-$ Balance end of year $$0$

Eligible Dividend Refund for $2020$ $$0$

NERDTOH $-$ Balance end of year $$33,000$

Non$-$Eligible Dividend Refund for $2020$ $$20,000$

Net Capital Losses from $2020$ $$5,000$

The gross revenues and salaries at its permanent establishments were as follows:

Gross Sales Office Supplies Exp Salaries

Saskatchewan $$1,360,000$ $$30,000$ $$480,000$

US $$167,000$ $$3,000$ $$45,000$

TOTAL $$1,527,000$ $$33,000$ $$525,000$

Allocation of Small Business Deduction:

$ to Running Free Enterprises Ltd$.$ $$130,000$

$ to Other Associated Corps $$370,000$

Total $$500,000$

Required:

$1)$ Use Section $3$ Ordering to determine Net Income for Tax Purposes.

of the shares of Beaver Corp are owned by Running Free Enterprises Ltd$.$

$2)$ Complete a T$2$ Return and any other related schedules for Running Free Enterprises Ltd$.$ calculating

the corporation's tax refund or balance unpaid. Assume that the taxpayer wishes to minimize total

taxes payable and that the Saskatchewan Corporation Tax Rate is $1\%$ for $2021.$

of the shares of Lion Ltd are owned by Running Free Enterprises Ltd

$3)$ Show and submit all calculations