Question

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:

Domicile State		Sharon Inc. State X (throwback)		Carol Corp. State Y (throwback)		Josey Corp. State Z (nonthrowback)		Janice Corp. State Z (nonthrowback)
Dividend income		$	1,000	$	200	$	300	$	500
Business income		$	50,000	$	30,000	$	10,000	$	10,000
Sales:	State X	$	70,000	$	10,000	$	10,000	$	10,000
	State Y			$	40,000	$	5,000
	State Z			$	20,000	$	20,000	$	10,000
	State A	$	20,000
	State B	$	10,000					$	10,000
Property:	State X	$	50,000	$	20,000			$	10,000
	State Y			$	80,000
	State Z					$	25,000	$	20,000
	State A	$	50,000
Payroll:	State X	$	10,000	$	10,000
	State Y			$	40,000
	State Z					$	3,000	$	10,000
	State A							$	10,000

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 X apportionment factor for Sharon Inc., Carol Corp., Josey Corp., and Janice Corp.

b. Calculate the business income apportioned to State X.
c. Calculate the taxable income for State X for each company.

d. Determine the tax liability for State X for the entire group.

Answer 1

Given that:

lution in -the CusmentScenaio of S incorporation S the computa hon aPorto orionmen es nd X, haron Caol oso Nems) Jenice o Nexus 4 40000 I 10o00 SalesX 3l0000 3 30000 0-33 IDooo 30000 0-33 oper lotol $10000 5000 300o S2000O Popo O 2

2 Calcula-tions oppes fionmen γο ayon nice Sales 0- 3333 0.2 10. 3333 0.2 O.5t 06666 Property YO total 2- 2 fockor /3 a) Apporton ment lachor 0-3333 0 eihon ment tac Total busines 2ncome IS50000 š 30000 10000 (e) Apporhoned busness$34joo222 Allocaled Income

he above calculatiom o..チ3333 -) APfo hon mert 구oden 어 slde x4by Carol Trc.is D.18 0-2222 form the aboelculatht Sharo Business intome tionment ol Slote ron me

rom -the abovte caladaliom うTaxable income e,.stole xto daam Ires 37667 プTaxable fncerte e stole x ta aetolInc.TS うTanable income et slake xta arol Trc.rs înComde 522 22 tor la) Total (Janable Yncone $45389 ence 『s )36493