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Waco Leather Inc., a U.S. corporation, reported total taxable income of $4.8 million. Taxable income included $1.36 million of foreign source taxable income from the

Waco Leather Inc., a U.S. corporation, reported total taxable income of $4.8 million. Taxable income included $1.36 million of foreign source taxable income from the companys branch operations in Mexico. All of the branch income is general category income. Waco paid Mexican income taxes of $353,600 on its branch income.

Compute Wacos allowable foreign tax credit. Assume a U.S. corporate tax rate of 34 percent.

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