new customers in the United States. In addition, the company has opened a branch location in...

  

Transcribed Image Text:

new customers in the United States. In addition, the company has opened a branch location in Alberta by establishing an office and manufacturing plant staffed by new Alberta personnel. The Alberta manufacturing plant is the company's first venture into manufacturing. Selected financial information for the company's current fiscal period is presented below. Canadian sales Foreign sales Cost of sales Salaries and wages Profit from operations Dividend income Taxable capital gains Head office $9,317,000 850,000 6,149,200 1,597,200 1,597,200 106,500 93,200 Alberta branch $1,730,300 -0- 1,211,200 266,200 13,300 --0- 2. At the end of the previous year, the company had net capital tosses of $ 119,800 and non-capital losses of $ 159,700 that were available for carry-forward. The Alberta branch location includes a building and equipment. The company's accountant is in the process of determining the corporation's tax liability and indicates that the annualized cost of manufacturing capital employed in the Alberta branch is $200.000 and that the corporation's total annualized cost of tangible property used amounts to $800,00O. The accountant also Indicates that the manufacturing labour in the Alberta branch amounts to $120,000. This amount has been calculated in accordance with the income tax rules for determining manufacturing labour. 3. 4. The assumed provincial corporate income tax rate is 16% in Nova Scotia and 12% in Alberta. Required: For the current year, determine U.P.L's (a) net income for tax purposes: (b) taxable income; and (c) federal and provincial tax liabilities. 1. new customers in the United States. In addition, the company has opened a branch location in Alberta by establishing an office and manufacturing plant staffed by new Alberta personnel. The Alberta manufacturing plant is the company's first venture into manufacturing. Selected financial information for the company's current fiscal period is presented below. Canadian sales Foreign sales Cost of sales Salaries and wages Profit from operations Dividend income Taxable capital gains Head office $9,317,000 850,000 6,149,200 1,597,200 1,597,200 106,500 93,200 Alberta branch $1,730,300 -0- 1,211,200 266,200 13,300 --0- 2. At the end of the previous year, the company had net capital tosses of $ 119,800 and non-capital losses of $ 159,700 that were available for carry-forward. The Alberta branch location includes a building and equipment. The company's accountant is in the process of determining the corporation's tax liability and indicates that the annualized cost of manufacturing capital employed in the Alberta branch is $200.000 and that the corporation's total annualized cost of tangible property used amounts to $800,00O. The accountant also Indicates that the manufacturing labour in the Alberta branch amounts to $120,000. This amount has been calculated in accordance with the income tax rules for determining manufacturing labour. 3. 4. The assumed provincial corporate income tax rate is 16% in Nova Scotia and 12% in Alberta. Required: For the current year, determine U.P.L's (a) net income for tax purposes: (b) taxable income; and (c) federal and provincial tax liabilities. 1.

Answer rating: 100% (QA)

a Net Income for tax purposes Head Office Net IncomeTotal Re... View the full answer