Labled Ltd. was incorporated in 2003 and, since that time, it has been a Canadian controlled private company. Between the date of its corporation and December 13,2019, it has had the following transactions that relate to the Company’s capital dividend account.
In 2004, the Company received life insurance proceeds, net of the adjusted cost base of the policy, in the amount of $106,000.
In 2006, the Company received a capital dividend of $36,300.
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In 2011, the Company paid a capital dividend of $25,200. The required election was made.
In 2012, the Company sold a capital asset with an adjusted cost base of $194,300 for proceeds of $236,100.
In 2014, the Company sold two parcels of land. The first parcel of land, which had an adjusted cost base of $48,600, was sold for $93,400. The second parcel of land, which had an adjusted cost base of $112,600, was sold for $108,300.
In 2015, the Company paid a capital dividend of $16,400. The required election was made.
At the end of 2018, the Company sold an unlimited life franchise for $250,000. This franchise was acquired at the beginning of 2018 for $225,000. The Company took no amortization in 2018.
Determine the balance in the Company’s capital dividend account as of December 31,2019. Provide a separate calculation of the income inclusion resulting from the sale of the franchise.