Subject: Corporate Taxation

Please give a brief explanation of the answer

also show the clear calculation of Additional Refundable Tax (ART).

Thank you

4. During the year, Makisha Fashions Inc has the following sources of income:

Taxable capital gains $45,000

Allowable capital losses 42,000

Dividends from taxable Canadian corporations 25,000

Foreign Source Property Income 3,000

The company has taxable income of $495,000, of which $200,000 was eligible for the small business deduction. What is the total Additional Refundable Tax on Investment Income (ART)?

A. $ 640

B. $3,307

C. $5,120

D. $7,787