Question

3 Required information [The following information applies to the questions displayed below.) Part 3 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 eBook De 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: Statex State Y State z State A Sharon Inc. Carol Corp. Josey Corp. Janice Corp. State x State Y State 2 State z (throwback) (throwback) (nonthrowback) (nonthrowback) $ 1,280 $ 575 $ 405 $ 605 50,300 31,500 11,700 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.) c. Calculate the taxable income for State X for each company. State X taxable

Answer 1

Answer:

	State X taxable Income
Sharon	33,839
Carol	6,651
Josey	0
Janice	2,614

Calculation:

First step is to do the calculation to get the total of Sharon Inc, Carol Corp, Josey Corpand Janice Corp in State X. For that we need inpu each of X's sales, property and payroll and then also input the total of X,Y,Z, A and B.

Then we need to divide the X share with the total share for each of them. So we get the percentage for sales, property and Payroll for all of them. We won't calculate the apportionment for property or payroll since Josey has no property or payroll.Then we need to add all the percentages we calculated and divide each with 3. The calculation is done as below:

	Sharon Inc.	Carol Corp.	Josey Corp.	Janice Corp.
Sales X	79,700	16,000	17,800	11,500
Total	126,000	87,300	58,600	43,000
Property X	59,250	28,100	-	19,500
Total	128,250	114,850	45,750	60,000
Payroll X	13,300	15,400	-	-
Total	13,300	59,150	5,000	26,400
Sales	0.6325	0.1833		0.2674
Property	0.4620	0.2447		0.3250
Payroll	1.0000	0.2604		0.0000
Total	2.0945	0.6883		0.5924
Apportionment Factor	0.6982	0.2294		0.1975

Calculation of allocated income:

Then we need to multiply the business income with the apportionment factor to get the allocated income.

	Sharon Inc.	Carol Corp.	Janice Corp.
Business Income	50,300	31,500	16,300
Apportionment Factor	0.6982	0.2294	0.1975
Allocated Income	35,119.46	7,226.10	3,219.25

Calculation of taxable income:

Last step is to deduct the dividends from the allocated income, to get the taxable income.

	Sharon Inc.	Carol Corp.	Janice Corp.
Allocated Income	35,119	7,226	3,219
Dividend	1,280	575	605
Taxable Income	33,839	6,651	2,614