George is a junior accountant. Company XYZ Inc. a Canadian-controlled private corporation. Assume the Division B (income for tax purposes) was correctly calculated below. After Division B income George is unsure of his numbers and has asked you for your help in completing the corporate tax return. The following information has been gathered from the working paper files of XYZ Ltd. for its fiscal year ending on December 31, 2021.

Notes and additional information:

1) The corporation has permanent establishments in Toronto and Washington in the United States. Its gross revenue and salary and wages information is as follows:

	Toronto	Washington
Gross revenue	$3,204,000	$1,373,141
Salaries and wages	$1,383,000	$413,103

(2) The United States income above is expressed in Canadian dollars. During 2021, income taxes of C$43,500 were paid to the various levels of U.S. government.

(3) The Canadian interest is from the following sources:

Interest on debt loaned to a Canadian subsidiary, Forsure Ltd., of which XYZ Ltd. owns 60% of the shares:

Forsure Ltd. carries on an active business	$58,200
Treasury bill interest from seasonal excess cash	$17,700
Bank interest on fluctuating cash working capital	$4,000
	$79,900

(4) Dividends:

Portfolio eligible dividends from non-connected companies received March 31	$31,200
Eligible Dividends from Forsure Ltd., received in July 2021, from its subsidiary, which resulted in a total dividend refund of $10,600 to Forsure Ltd.	$45,900
	$77,100

(5) The recapture arose on the disposal of all of the company's Class 10 assets when it discontinued its unprofitable delivery service division. (6) Rental income of C$31,000 arose from a warehouse in the United Kingdom which had been previously used by the company. The company had discontinued its U.K. operations in 2020. Withheld tax totalled C$9,700 during 2021.

(7) Donations were made up of the following amounts: Salvation Army donation 2020 $15,200 Cancer Society donation 2014 $5,000 (8) Net Capital losses from August 2000 $20,000 (9) The balance in the Refundable Dividend Tax on Hand(non-eligible), on December 31, 2020, was $14,000, before the Dividend Refund(non-eligible) of $6,000 for the 2020 year.

(10) During 2021, XYZ Ltd. declared and paid the following taxable cash dividend which were non-eligible:

Date Declared Date Paid Amount March 31, 2021 April 15, 2021 $33,500 June 30, 2021 July 15, 2021 $33,500 September 30, 2021 October 15, 2021 $33,500 December 31, 2021 January 15, 2022 $67,000 11) XYZ Ltd. allocated $40,000 of it SBD to other Associated companies. The Taxable capital of the associated group was $10,500,000. Required:

(A) Compute the taxes paid by showing the federal Part I tax and provincial tax at a 14% rate for Ontario on federal taxable income payable by the corporation for 2021. Show in detail the calculation of all tax deductions in the computation, using a separate schedule for each special tax deduction.

(B) Compute the refundable tax on hand balance as at December 31, 2021, showing in detail your calculation and compute the dividend refund for 2021.