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The company also has operations in Vancouver, The Sundean Company has its national headquarters in Toronto, and all of its senior manage- Calgary, Saskatoon, and Halifax

Accounting Jan 26, 2021

The company also has operations in Vancouver, The Sundean Company has its national headquarters in Toronto, and all of its senior manage- Calgary, Saskatoon, and Halifax. In each of these cities, warehouse space is maintained and orders are filled. In addition, a sales staff operates out of office space in each warehouse, taking nues of $10,483,000. Also during the current year, the company had salaries and wages totaling $1,247,000. These gross revenues and expenses were distributed among the provinces where (Geographical Allocation Of Income) orders throughout the province in which the warehouse is located. For the current taxation year, the company's Taxable income totaled $1,546,000, on gross rever the company has operations in the following manner: Alberta British Columbia Nova Scotia Saskatchewan Ontario Total Gross Revenues $ 1,886,940 2,306,260 1,362,790 1,257,960 3,669,050 $10,483,000 Wages And Salaries Accrued $ 261,870 274,340 174,580 99,760 436,450 $1,247,000 Required: Calculate the amount of Sundean Company's Taxable income for the current year Chat would be allocated to each of the five provinces. Any percentages used in your calculations should be rounded to one decimal place.

Expert Solution

In general, when a taxpayer maintains permanent establishments in more than one province, income is allocated according to the proportion of gross-income earned and salaries and wages paid in those provinces.

Formula to Calculate allocation % = (Salary in province / Total Salary ) + (Revenue in province / Total Revenue) *1/2

Taxable Income Allocation = Total Taxable income * rate for allocation

Please refer below calculation for same.

Province Wages and Salaries Accrued % for Wages and Salary Gross Revenue % for Gross Revenue Total of % of Revenue and Salary Rate for allocation (Divide by 2 for % of Total Revenue) Taxable Income Allocation
Alberta $                    261,870 21.0% $        1,886,940 18.0% 39.0% 19.5% $                                    301,470
British Columbia $                    274,340 22.0% $        2,306,260 22.0% 44.0% 22.0% $                                    340,120
Nova Scotia $                    174,580 14.0% $        1,362,790 13.0% 27.0% 13.5% $                                    208,710
Saskatchewan $                      99,760 8.0% $        1,257,960 12.0% 20.0% 10.0% $                                    154,600
Ontario $                    436,450 35.0% $        3,669,050 35.0% 70.0% 35.0% $                                    541,100
Total $                1,247,000   $      10,483,000       $                                1,546,000

Hope given answer will solve your query.

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