Mackinac Corporation, a U.S. corporation, reported total taxable income of $5 million. Taxable income included $1.5 mil

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Mackinac Corporation, a U.S. corporation, reported total taxable
income of $5 million. Taxable income included $1.5 million of
foreign source taxable income from the company’s branch operations
in Canada. All of the branch income is general category
income. Mackinac paid Canadian income taxes of $325,000 on
its branch income. Compute Mackinac’s allowable foreign tax
credit. Assume a U.S. corporate tax rate of 21%.
Waco Leather, Inc., a U.S. corporation, reported total taxable
income of $5 million. Taxable income included 1.5 million of
foreign source taxable income from the company’s branch operations
in Mexico. All of the branch income is general category
income. Waco paid Mexican income taxes of $295,000 on its
branch income. Compute Waco’s allowable foreign tax
credit. Assume a U.S. corporate tax rate of 21%.