Assignment
Pyper Inc. has a December 31 year end. It is a Canadian controlled private corporation. The following information relates to its 2021 taxation year:
1. At the beginning of 2021, both the company's Eligible RDTOH and the company's GRIP had balances of nil. Also on this date, balance in its Non-Eligible RDTOH was $12,000.
2. A few years ago Pyper Inc. purchased 70 percent of the outstanding shares of Style Ltd. On November 1, 2021, Style Ltd. paid a non-eligible dividend of $50,000. Droid Inc. collected $35,000 (70 percent) of this dividend. As a result of paying the $50,000 dividend, Style Ltd. collected a dividend refund of $8,000.
3. Other income that was reported by Pyper Inc. consisted of the following amounts:
Interest $2,000
Capital Gain (Sale Of Land) 30,000
Eligible Dividends From Canadian Public Companies 7,000
The interest is on deposits of temporary cash balances set aside for the purchase of inventories.
4. The company's Taxable Income for the year ending December 31, 2021, was $90,000. No foreign income was included in this total. Assume the Part I Tax Payable for the year ending December 31, 2021, was correctly calculated as $25,000.
Because of its association with Style Ltd., Droid's share of the annual business limit on income eligible for the small business deduction is $40,000. Droid's active business income is greater than its share of the annual business limit.
5. Droid Inc. paid taxable dividends of $20,000 during the year. It is the policy of the corporation to designate dividends as eligible only to the extent that a dividend refund will be available on their payment.
Task
1. Determine the refundable portion of Pyper's Part I Tax Payable for 2021.
2. Determine Pyper's Part IV Tax Payable for 2021.
3. Determine the December 31, 2021, balances in Pyper's Eligible RDTOH and its Non-Eligible RDTOH.
4. Determine Pyper's 2021 dividend refund, providing separate amounts for refunds on eligible dividends and refunds on non-eligible dividends.