Accounting -Sharon Inc. is headquartered in State X and owns 100 percent of Carol, Josey

| January 31, 2017

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 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 $ 1,030 $ 560 $ 420 $ 400
Business income $ 40,000 $ 45,250 $ 16,400 $ 16,200
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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