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U.P.I. 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 below. Head office Alberta branch Canadian sales $7,700,000 $1,430,000 Foreign sales 770,000 -0- Cost of sales 5,082,000 1,001,000 Salaries and wages 1,320,000 220,000 Profit from operations 1,320,000 11,000 Dividend income 88.000 -0- Taxable capital gains 77,000 --- 2. At the end of the previous year, the company had net capital losses of $ 99,000 and non capital losses of $ 132,000 that were available for carry-forward. 3. 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: 4 Required: 1. For the current year, determine U.P.I's (a) net income for tax purposes; (b) taxable income; and (c) federal and provincial tax liabilities. Profit 21 Net Income for tax purposes Taxable income 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 Taxable income 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 MI 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 Cinder Inc. is a Canadian-controlled private corporation based in your province. The company operates a wholesale business. The following information is provided for its year ended May 31, 2020: 1. Net Income for tax purposes is $212,000. Included in this amount is the following: Interest income from bonds Interest income on overdue trade accounts receivable Taxable capital gain on sale of land Eligible dividends from Canadian public corporations Non-eligible dividends from PQ Ltd. (see item 2 below) $10,000 1,000 14,000 12,000 6,000 2. PQ Ltd. Is a Canadian-controlled private corporation. Cinder owns 60% of its common voting shares. In 2020. PO claimed the small business deduction on $320,000 of its active business incomo. PQ paid a non eligible dividend of $10,000, of which Cinder's share is $6,000 (60%). As a result of the dividend, PQ received a dividend refund of $1,000 from its non-eligible ROTOH. 3. Cinder made contributions of $4,000 to registered charities. This amount has been correctly adjusted for in computing net income for tax purposes 4. The following information is from the 2019 Tax return of Cinder Non-capital losses Non-eligible refundable dividend tax on hand Eligible refundable dividend tax on hand Dividend refund Taxable capital Adjusted aggregate investment income $ 5,000 2,000 0 0 Unders 10 million $30,000 4. The following information is from the 2019 Tax return of Cinder: Non-capital losses Non-eligible refundable dividend tax on hand Eligible refundable dividend tax on hand Dividend refund Taxable capital Adjusted aggregate investment income $ 5,000 2,000 0 0 Unders 10 million $30,000 5. On May 31, 2020, Cinder paid taxable dividends of $20,000 (eligible $10,000 and non-eligible $10,000) to its shareholders. Required: Determine Cinder's federal income tax for the 2020 taxation year. (use 0.3067 when multiplying to represent 307%, and 0.3833 when multiplying to represent 38 1/3%. Do not multiply by more than 4 decimal places and round your final answer to the nearest dollar. Enter subtractions as negative amounts.) Net Income for tax purposes Taxable income Active business income Less: Less: Less: Active business Income Aggregate investment income Part I tax Small business deduction - 19% x least of 0 () Refundable tax on investment income 10 2/3% times the least of U.P.I. 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 below. Head office Alberta branch Canadian sales $7,700,000 $1,430,000 Foreign sales 770,000 -0- Cost of sales 5,082,000 1,001,000 Salaries and wages 1,320,000 220,000 Profit from operations 1,320,000 11,000 Dividend income 88.000 -0- Taxable capital gains 77,000 --- 2. At the end of the previous year, the company had net capital losses of $ 99,000 and non capital losses of $ 132,000 that were available for carry-forward. 3. 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: 4 Required: 1. For the current year, determine U.P.I's (a) net income for tax purposes; (b) taxable income; and (c) federal and provincial tax liabilities. Profit 21 Net Income for tax purposes Taxable income 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 Taxable income 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 MI 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 Cinder Inc. is a Canadian-controlled private corporation based in your province. The company operates a wholesale business. The following information is provided for its year ended May 31, 2020: 1. Net Income for tax purposes is $212,000. Included in this amount is the following: Interest income from bonds Interest income on overdue trade accounts receivable Taxable capital gain on sale of land Eligible dividends from Canadian public corporations Non-eligible dividends from PQ Ltd. (see item 2 below) $10,000 1,000 14,000 12,000 6,000 2. PQ Ltd. Is a Canadian-controlled private corporation. Cinder owns 60% of its common voting shares. In 2020. PO claimed the small business deduction on $320,000 of its active business incomo. PQ paid a non eligible dividend of $10,000, of which Cinder's share is $6,000 (60%). As a result of the dividend, PQ received a dividend refund of $1,000 from its non-eligible ROTOH. 3. Cinder made contributions of $4,000 to registered charities. This amount has been correctly adjusted for in computing net income for tax purposes 4. The following information is from the 2019 Tax return of Cinder Non-capital losses Non-eligible refundable dividend tax on hand Eligible refundable dividend tax on hand Dividend refund Taxable capital Adjusted aggregate investment income $ 5,000 2,000 0 0 Unders 10 million $30,000 4. The following information is from the 2019 Tax return of Cinder: Non-capital losses Non-eligible refundable dividend tax on hand Eligible refundable dividend tax on hand Dividend refund Taxable capital Adjusted aggregate investment income $ 5,000 2,000 0 0 Unders 10 million $30,000 5. On May 31, 2020, Cinder paid taxable dividends of $20,000 (eligible $10,000 and non-eligible $10,000) to its shareholders. Required: Determine Cinder's federal income tax for the 2020 taxation year. (use 0.3067 when multiplying to represent 307%, and 0.3833 when multiplying to represent 38 1/3%. Do not multiply by more than 4 decimal places and round your final answer to the nearest dollar. Enter subtractions as negative amounts.) Net Income for tax purposes Taxable income Active business income Less: Less: Less: Active business Income Aggregate investment income Part I tax Small business deduction - 19% x least of 0 () Refundable tax on investment income 10 2/3% times the least of

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