The accountant, Ryan Mailling, of Double-D Retailing Ltd. (DRL), a Canadian-controlled private corporation, has requested your assistance with respect to the calculation of the company's Part I tax payable.
Ryan has provided you with the following information.
(1) DRL is not associated with any other corporation.
(2) For DRL's December 31 taxation year-end, the corporation correctly reported:
Active business income............................................................... $320,000
Investment income
Canadian .................................................................................... 5,000
Foreign ..................................................................................... 12000
Charitable donations ....................................................................... 9000
Net capital loss deducted ................................................................. 2000
Non-capital loss deducted ............................................................... 10000
Taxable income ........................................................................ 316,000
(3) Withholding tax on the foreign investment income was $1,800.
(4) Taxable capital employed in Canada in 2011 was $11.9 million.
REQUIRED
Calculate the federal Part I tax payable for the taxation year ended December 31, 2012. Assume that the foreign non-business tax credit is equal to the foreign tax paid through withholding. Show all calculations whether or not relevant to the final answer.