PROVINCIAL INCOME ALLOCATION (12 Marks) WGH Operations LTD. (WHG) has permanent establishments in 4 Canadian provinces....

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.

Expert Solution

	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

ekkarill92 answered 3 years ago

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