You are working with ABCD tax consultant group, new client; Leduc Corporation asks you to help them to identify there tax payables, and they provide you with the following information. Leduc co. is a Canadian Controlled Private Corporation and the Taxable Capital Invested in Canada $5,000,000. Its business activity importing consumer goods from South Africa, and distribute to different retailers in Canada.

They provide you with there Income statement before taxes for the year ending Dec 31, 2019.

Leduc Corp.

Income Statement before Taxes

Year ending Dec 31, 2019

Net Sales	$8,000,000
Cost Of goods Sold	$6,550,000
Gross Profit	$1,450,000
Selling and administration Expenses:
Selling expenses	$382,000
Wages and Salaries	$308,000
Rent and office expenses	$276,000
Amortization Expense	$50,000
Other Expenses	$189,000
Total Expenses Not including Income Taxes	$1,205,000
Other Income	$167,000
Income before Taxes	$412,000

Leduc corp. did not complete there Balance Sheet but they provide you with some accounts balances:

• Equipment $426,000 (net of $414,000 Accumulated Amortization, the original costs was $ 840,000; UCC $256,000 all equipments in class 8 (CCA rate 20%)).
• Future income tax liability $153,000;
• Investment in Devon Corp. $ 285,000 (this equal to 2% of the market value of Devon voting shares, (not connected))
• Retained Earning $2,000,000.

Note1) Other expenses includes; Interest paid on the business line of credit$7,000; Charitable Donation $65,000; Fuel costs $74,000; Meals and entertainment $ 6,720; Province of Alberta Golf club membership dues $ 2,800 and professional service fees $33,480

Note2) Other Income includes; Interest Revenue $20,000 from Canadian sources; Dividend Income $90,000 from Devon Corp. Canadian corp.; Gain on Sale of equipment $57,000 (Equipment original cost was $62,000; net book value $27,500; and sold for $84,500)

Note3) While you interview the client you found that, Leduc co. is associate with Devon co. and the agreed to split and business deductions / credit equally.

Note4) Leduc co. declares and pays $3000 dividend during the year. On December 31, 2018 Refundable Dividend Tax On Hand account balance was $7,000.

Note5) Leduc co, has losses carried from 2009 of: net capital loss of $206,000, non-capital loss of $ 16,000; donations to Canada Red cross 12,000. Those amounts will be deducted if allowed

Required:

For Leduc co, taxation year ended Dec 31, 2019, calculate the following items using Excel worksheets:

1. Minimum Net Income for Tax Purposes, if any
2. Taxable Income for the Year, if any
3. Part I federal Tax Payable (including ART)
4. Part IV Federal Tax Payable
5. Refundable Dividend Tax On Hand account balance at Dec 31,2019
6. The Dividend refund, if any
7. Total (minimum) Federal Tax Payable
8. Write a memo (one to maximum 2 pages) to Leduc co. Owner explain your work. The memo should include why some amount of income replaced, some expense removed. Also, Leduc owner think they should not pay any taxes this year based on losses from prior years. May be after you complete the return you notice they should pay tax, then explain why. In general, explain what you did and justify your numbers.

Note: Please show all the calculations used to provide the required information, including those for which result in Nil. (Final answer will not grant any marks). Your answer submitted using excel. No handwritten will be marked.