Question

1 Required information [The following information applies to the questions displayed below.) Part 1 of 4 Sharon Inc. is headquartered in State X and owns 100 percent of Carol Corp., Josey Corp., and Janice Corp., which form a single unitary group. Assume sales operations are within the solicitation bounds of Public Law 86-272. Each of the corporations has operations in the following states: 2.5 points 11,700 eBook Domicile State Dividend income Business income Sales : State x State Y State z State A State B Property: State x State y State z State A Payroll: State x State Y State 2 State A Sharon Inc. Carol Corp. Josey Corp. Janice Corp. State x State Y State z State 2 (throwback) (throwback) (nonthrowback) (nonthrowback) $ 1,280 $ 575 $ 405 $ 605 50, 300 31,500 16,300 79,700 16,000 17,800 11,500 50,000 8,300 21,300 32,500 14,000 32,200 14,100 17,500 59, 250 28,100 19,500 86,750 45, 750 40,500 69,000 13,300 15,400 43,750 5,000 12,300 14,100 References Compute the following for State X assuming a tax rate of 15 percent. (Use an equally weighted three-factor apportionment. Round all apportionment factors to 4 decimal places. Round other answers to the nearest whole dollar amount. Leave no answer blank. Enter zero if applicable.) a. Calculate the State Xapportionment factor for Sharon Inc., Carol Corp., Josey Corp., and Janice Corp. State X Apportionment factors

Answer 1

In the present situation of S corporation, below is the computation of apportionment factor.

Josey does not have any property or payroll in State X, it does not have any nexus with state X.

Ans a
			Calculation	Sharon	Carol	Josey	Janice
Sales ($)	A	X	sales in state X	79,700	16,000	17,800	11,500
	B	Total ($)	Total	126,000	87,300	58,600	43,000
	C	Proportion	A / B	0.6325	0.1833	0.3038	0.2674	upto 4 decimals
Property ($)	D	X	Property in state X	59,250	28,100	0	19,500
	E	Total ($)	Total	128,250	114,850	45,750	60,000
	F	Proportion	D / E	0.4620	0.2447	0.0000	0.3250	upto 4 decimals
Payroll ($)	G	X	payroll in state X	13,300	15,400	0	0
	H	Total ($)	Total	13,300	59,150	5,000	26,400
	I	Proportion	G / H	1.0000	0.2604	0.0000	0.0000	upto 4 decimals
	J
	K	Total apportionment	C+F+ I	2.0945	0.6883	NA	0.5924
APPORTIONMENT FACTOR	L	DIVIDE BY 3	K / 3	0.6982	0.2294	NA	0.1975	upto 4 decimals
We are not going to calculate the apportionment for property or payroll since Josey has no property or payroll.