In: Accounting
PROVINCIAL INCOME ALLOCATION
WGH Operations LTD. (WHG) has permanent establishments in 4 Canadian provinces.
The breakdown of the revenues and the salaries attributable to each permanent establishment is as follows:
Gross Revenue for WGH |
Salaries and wages for WGH |
||
Alberta |
$3,000,000 |
Alberta |
$250,000 |
Saskatchewan |
$20,000,000 |
Saskatchewan |
$450,000 |
Manitoba |
$37,000,000 |
Manitoba |
$300,000 |
Ontario |
$55,000,000 |
Ontario |
$1,000,000 |
Canada -- Total |
$115,000,000 |
Canada-- Total |
$2,000,000 |
WGH had Taxable Income of $25,000,000 in 2019.
REQUIRED: Determine the amount of Taxable Income to allocate to each province.
Gross Revenue | Gross Wages | Net Revenue | Proportionate share of each province | |
Alberta | 30,00,000 | 2,50,000 | 27,50,000 | 2.43 |
Saskatchewan | 200,00,000 | 4,50,000 | 195,50,000 | 17.30 |
Manitoba | 370,00,000 | 3,00,000 | 367,00,000 | 32.48 |
Ontario | 550,00,000 | 10,00,000 | 540,00,000 | 47.79 |
Canada -- Total | 1150,00,000 | 20,00,000 | 1130,00,000 | 100 |
WGH Taxable income for 2019 | 250,00,000 | |||
Allocation of taxable income | Taxable income | |||
Alberta | 25000000*2.43% | 6,08,407 | ||
Saskatchewan | 25000000*17.3% | 43,25,221 | ||
Manitoba | 25000000*32.48% | 81,19,469 | ||
Ontario | 25000000*47.79% | 119,46,903 |