You have a client Anna Delvey, a Canadian resident, who owns all of the issued shares of ADF Corporation, which carries on an art and luxury business. The taxation year-end of the corporation was December 31. Anna has agreed to sell the assets of the company (except cash) to a purchaser for a total of $1,215,000, the breakdown of the FMV of assets is below in the balance sheet. The sale is effective as at the year end of ADF. In the 2021 taxation year, the business broke even for tax purposes. ADF Corporation BALANCE SHEET As at December 31, 2021 Assets FMV Current: Cash Marketable Securities $74,000 25,000 15,000 Accounts Receivable $176,000 Less: reserve for doubtful accounts 6,000 170,000 172,000 Inventories, at cost 230,000 240,000 499,000 Property and plant Land, at cost 60,000 110,000 Buildings & equipment, at cost (Note 1) $750,000 Less: accumulated amortization 290,000 460,000 490,000 Intangibles, at cost (Note 1) 100,000 Less: accumulated amortization Liabilities and Shareholder's Equity Current liabilities 57,500 42,500 188,000 1,061,500 1,215,000 $208,000 20,000 Future income taxes Shareholder's Equity Common share Capital Authorized 50,000 shares Issued 1,000 shares $1,000 Retained earnings (Note 2) 832,500 833,500 1,061,500 Additional Information: 1. The tax values of all assets are identical to amounts for book purposes, except for the building and equipment and the intangibles. The following pertains to these assets: Cost UCC FMV Building Equipment $600,000 $304,000 $423,000 150,000 76,000 67,000 $750,000 $380,000 $490,000 Intangibles - Class 14.1 $100,000 $88,000 $188,000 2. 3. 4. 5. The intangibles consist of a client list that was acquired in 2018. The fair market value of the client list is $120,000. The fair market value of goodwill is $68,000. As of the balance sheet date, the non-eligible RDTOH balance for the company is $13,000. The CDA balance is $12,000. ADF pays corporate tax at a 13% rate on active business income eligible for the small business deduction and at a 40% rate on aggregate investment income, before the 10%% additional refundable tax. ADF has a GRIP balance of $0 at December 31, 2021. ADF and the purchaser elected under section 22 with respect to the accounts receivable. The cost of the ADF shares to Anna was $1,000. Required: (a) Compute the amount available for distribution to Anna on the sale of assets. (b) Determine the components of the distribution to Anna on a winding-up of the corporation