You, CPA, are a corporate tax accountant of a Canadian-controlled private corporation located in Ontario. The CEO of the company has approached you on February 06, 2023 and would like you to calculate the federal income tax of the company for the taxation year ended December 31, 2022.

You have recently prepared the income statement of the company for the fiscal year ended December 31, 2022:

Sales 1,340,000 Cost of goods sold (789,000)Gross profit 551,000 Expenses Salaries and wages 98,000 General and administrative 25,500 Depreciation and amortization 34,000 Advertising 20,000 Charitable donation 6,000 Other 18,600 (202,100) 348,900 Other Income Dividend from Canadian private corporation 11,000 Royalties 21,000 Capital gain on the sale of land 43,000 75,000 Net income before tax 423,900

You also noted the following:

• Other expense contains meals and entertainment expense of $8,800;
• Capital cost allowance for 2022 was $28,000;
• There is no other associate corporations to share the small business limit; and
• unused non-capital loss of $7,500 from prior years.

Required:

For the taxation year ended December 31, 2022, calculate the following

a) Net income for tax purposes

b) Taxable income

c) Total federal income tax (ignore Part IV tax of the dividend income)

Note:

You are required to show the full calculation (including the applicable components) in order to earn full marks

You are not required to reference legislation in Income Tax Act