You, CPA, work for Smith and Barnes Consultants, a CPA firm. It is now March $15,2024$ and you have just finished meeting with Mr$.$ Martin, a new client of your firm, and a Canadian resident. Mr$.$ Martin owns $100\%$ of Martin$$s Sunglasses Emporium Inc. $($MSE$).$ MSE is a Canadian controlled private corporation $($CCPC$)$ operating an active business in Canada. MSE has a December $31$st year end. Additional information about your client is provided in Exhibit I.

Mr$.$ Martin isn$$t sure if he$$ll be able to file the corporate taxes on time, so he wants you to draft a memo to him describing and calculating an estimate of MSE$$s minimum net income for tax purposes, taxable income and federal income tax owing for $2023.$ He will use this estimate to make sure his payment is made on time, as he doesn$$t want to pay any interest or penalties. Mr$.$ Martin wants you to round your numbers to the nearest dollar. Additionally, he would like you to tell him when MSE$$s $2023$ income tax balance owing is due, and when is the T$2$ corporate tax return is due.

Your client wants to minimize his $2023$ taxable income and tax owing and wants to see all your detailed calculations. You can ignore HST$/$GST and provincial income tax. MSE$$s taxable capital is less than $$10$M and it has no investment income in the prior year. It is not associated with any other companies. You can ignore the tax on split income $($TOSI$).$

Mr$.$ Martin also tells you that he is planning to personally invest in a partnership $(50/50)$ with his best friend, Bill. He has provided you with a list of the partnership$$s expected $2024$ income and expenses in Exhibit II$,$ assuming he moves forward with this investment. Based on the information provided in the exhibit, please explain $($briefly$)$ to Mr$.$ Martin how partnership income is taxed to the individual partners, and how much partnership income he should expect to report on his personal tax return for $2024.$

Note: you will lose $1$ mark for each incorrect addition$/$subtraction from income$/$taxes owing.