The following income statement was prepared for Ludlum, Clancy, Follet & Associates, a partnership comprised of four partners who share income equally.

The adjusted cost base to Mr. Clancy of his partnership interest was $45,792 at the beginning of the year. His drawings for the year were $77,500.
The dividends were received from a CCPC, all of whose income was eligible for the small business deduction.
REQUIRED
(A) Compute the partnership income for the year, the income to be allocated to Mr. Clancy and the nature of the income.
(B) Compute Mr. Clancy's taxable income and tax payable for 2008 assuming a marginal federal tax rate of 29% and a provincial marginal tax rate of 17%.
(C) Compute the adjusted cost base to Mr. Clancy of his partnership interest.

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Ludlum, Clancy, Follet & Associates INCOME STATEMENT for the year ended December 31, 2008 Gross revenue S994,250 Less: Professional staff employee salaries Office salaries Rent Office supplie Client entertainment. Capital cost allowance... 16,222 Donations to charities $229,000 74,000 42.000 17,000 5,075 250,000 33,297 360,953 Gain on sale of secuities of public companiesS100,000 Dividend income Dividends received from taxable Canadian corporat Capital dividends 25,000 5,000 130,000 490.953 Net income for accounting purposes