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 company's first venture into

manufacturing.

Selected financial information for the company's current fiscal period is presented in the following chart.

At the end of the previous year, the company had net capital losses 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

$$200,000$ and that the corporation's total annualized cost of tangible property used amounts to $$800,000.$ 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.

The assumed provincial corporate income tax rate is $16\%$ in Nova Scotia and $12\%$ in Alberta. Required:

For the current year, determine UPI's

$($a$)$ net income for tax purposes;

$($b$)$ taxable income; and

$($c$)$ federal and provincial tax liabilities.

Profit

Net Income for tax purposes

Taxable income

Allocate Income between Head office and Branch

Taxable Income for Head Office $-$ Nova Scotia

Taxable Income for Alberta

Total Taxable Income Federal Taxes

Federal Basic tax

Abatement

General tax reduction

Net Federal Tax

Provincial Taxes

Head Office $-$ Nova Scotia

Branch $-$ Alberta

Total Federal and Provincial Taxes