QUESTION

# Sharon Inc. is headquartered in State X and owns 100 percent of Carol, Josey, and Janice Corps, which form a single unitary group. Assume sales operations are within the solicitation bounds of Public

Sharon Inc. is headquartered in State X and owns 100 percent of Carol, Josey, and Janice Corps, 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 CorpState Y(throwback)Josey CorpState Z(nonthrowback)Janice CorpState Z(nonthrowback)

Dividend income\$1,030    \$560   \$420    \$400

Sales: State X\$83,200    \$19,500   \$11,900    \$12,200

State Y\$50,750   \$9,350

State Z\$30,000   \$39,000    \$11,900

State A\$34,000

State B\$15,500    \$11,500

Property: State X\$70,500    \$27,400   \$10,200

State Y\$102,250

State Z\$42,000    \$30,500

State A\$69,500

Payroll: State X\$17,600    \$14,500

State Y\$63,250

State Z\$5,100    \$13,400

State A\$16,000

Compute the following for State X assuming a tax rate of 15 percent. (Be sure to use an equally weighted three-factor apportionment formula. Round your apportionment factors to 4 decimal places. Also round your apportioned business income and tax liability to the nearest dollar amount.)

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.

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