Louise Corp. operates in 2 different states, Virginia and Maryland. Income for the most recent year is $500,000. Of that amount, $100,000 can be allocated to Maryland. Use the following table to answer the questions below. Maryland Virginia Sales 200,000 800,000 Property 300,000 300,000 Payroll 50,000 200,000 a) Assume that Virginia uses a single factor formula (based on sales). What is the income apportioned to Virginia? b) Assume that Virginia double weights sales in their apportionment formula (called the four-factor formula in lecture, the textbook calls it the three-factor formula with a double-weighted sales factor). What is the income apportioned to Virginia? c) Assume that Virginia uses the ‘standard’ three-factor formula to apportion income. What is the income apportioned to Virginia?
Louise Corp. operates in 2 different states, Virginia and Maryland. Income for the most recent year is $500,000. Of that amount, $100,000 can be allocated to Maryland. Use the following table to answer the questions below.
|
|
Maryland |
Virginia |
|
Sales |
200,000 |
800,000 |
|
Property |
300,000 |
300,000 |
|
Payroll |
50,000 |
200,000
|
a) Assume that Virginia uses a single factor formula (based on sales). What is the income apportioned to Virginia?
b) Assume that Virginia double weights sales in their apportionment formula (called the four-factor formula in lecture, the textbook calls it the three-factor formula with a double-weighted sales factor). What is the income apportioned to Virginia?
c) Assume that Virginia uses the ‘standard’ three-factor formula to apportion income. What is the income apportioned to Virginia?
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