Oldham, Incorporated ca

SWFT Comprehensive Vol 2020
43rd Edition
ISBN:9780357391723
Author:Maloney
Publisher:Maloney
Chapter17: Corporations: Introduction And Operating Rules
Section: Chapter Questions
Problem 32P
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Subject: accounting 

Oldham, Incorporated conducts business in State M and State N, which both use the UDITPA three-factor formula to apportion income.
State M's corporate tax rate is 4.5 percent, and State N's corporate tax rate is 7 percent. This year, Oldham had the following sales,
payroll, and property (in thousands of dollars) in each state:
Gross receipts from sales
Payroll expense
Property costs
State M
$ 3,480
1,300
1,110
State N
$ 8,370
1,790
1,350
Total taxable income subject to apportionment
Apportionment percentage
State taxable income
Tax rate
State tax
Required:
Oldham's before-tax income was $3.90 million. Compute Oldham's State M and State N tax if State N uses an apportionment formula
in which the sales factor is double-weighted.
Total
$ 11,850
3,090
2,460
Note: Round all apportionment factors to 4 decimal places, e.g., 47.15% would be 0.4715. Enter "Apportionment percentage" and
"Tax rate" in decimals and not in percentage. Do not round any intermediate values. Enter your answers in dollars and not in
millions or thousands of dollars.
State M
State N
Transcribed Image Text:Oldham, Incorporated conducts business in State M and State N, which both use the UDITPA three-factor formula to apportion income. State M's corporate tax rate is 4.5 percent, and State N's corporate tax rate is 7 percent. This year, Oldham had the following sales, payroll, and property (in thousands of dollars) in each state: Gross receipts from sales Payroll expense Property costs State M $ 3,480 1,300 1,110 State N $ 8,370 1,790 1,350 Total taxable income subject to apportionment Apportionment percentage State taxable income Tax rate State tax Required: Oldham's before-tax income was $3.90 million. Compute Oldham's State M and State N tax if State N uses an apportionment formula in which the sales factor is double-weighted. Total $ 11,850 3,090 2,460 Note: Round all apportionment factors to 4 decimal places, e.g., 47.15% would be 0.4715. Enter "Apportionment percentage" and "Tax rate" in decimals and not in percentage. Do not round any intermediate values. Enter your answers in dollars and not in millions or thousands of dollars. State M State N
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