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UPI Industries Ltd . , a Canadian corporation with a head office in Nova Scotia, has recently been designated a public corporation. Its shares are
UPI Industries Ltd a Canadian corporation with a head office in Nova Scotia, has recently been designated a public corporation. Its shares are traded on the TSX Venture Exchange. Over the past year, the company has pursued an aggressive expansion policy. Sales personnel based at head office have travelled to North Dakota and Minnesota and have achieved moderate success in developing 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 companys first venture into manufacturing.
Selected financial information for the companys current fiscal period is presented in the following chart.
Head office Alberta branch
Canadian sales $ $
Foreign sales
Cost of sales
Salaries and wages
Profit from operations
Dividend income
Taxable capital gains
At the end of the previous year, the company had net capital losses of $ and noncapital losses of $ that were available for carryforward.
The Alberta branch location includes a building and equipment. The companys accountant is in the process of determining the corporations tax liability and indicates that the annualized cost of manufacturing capital employed in the Alberta branch is $ and that the corporations total annualized cost of tangible property used amounts to $ The accountant also indicates that the manufacturing labour in the Alberta branch amounts to $ This amount has been calculated in accordance with the income tax rules for determining manufacturing labour.
The assumed provincial corporate income tax rate is in Nova Scotia and in Alberta.
Required:
For the current year, determine UPIs
a net income for tax purposes;
b taxable income; and
c federal and provincial tax liabilities.
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