37. Kim Corporation, a calendar year taxpayer, operates manufacturing facilities in States A and B. A summary ofKim's property holdings follows.Beginning of YearState AState BTotal$ 200,0001,500,000$ 300,000InventoryPlant and equipment$ 500,0004,000,0002,500,000Accumulated depreciation:plant and equipment(1,000,000)600,000(600,000)(1,600,000)Land1,000,000300,0001,600,000Rental propertyAccumulated depreciation:rental property900,0001,200,000(200,000)(90,000)(290,000)End of YearState AState BTotal$ 400,000$ 600,000$ 200,0001,200,000InventoryPlant and equipmentAccumulated depreciation:plant and equipment2,800,0004,000,000(1,200,000)(650,000)(1,850,000)Land600,0001,200,0001,800,000Rental property1,000,000300,0001,300,000Accumulated depreciation:rental property(250,000)(100,000)(350,000)*Unrelated to regular business operations.Determine Kim's property factors for the two states. The statutes of both States A and B provide that averagehistorical cost of business property is to be included in the property factor.

Step 1 Corporation D has nexus in States A and B. The following are the Corporation’s activities…

37. Kim Corporation, a calendar year taxpayer, operates manufacturing facilities in States A and B. A summary of Kim's property holdings follows. Beginning of Year State A State B Total $ 300,000 $ 200,000 1,500,000 $ 500,000 4,000,000 Inventory Plant and equipment Accumulated depreciation: plant and equipment Land Rental property Accumulated depreciation: rental property 2,500,000 (1,000,000) (600,000) (1,600,000) 600,000 1,000,000 1,600,000 900,000 300,000 1,200,000 (200,000) (90,000) (290,000) End of Year State A State B Total $ 600,000 $ 400,000 2,800,000 Inventory $ 200,000 Plant and equipment 1,200,000 4,000,000 Accumulated depreciation: plant and equipment (1,200,000) (650,000) (1,850,000) Land 600,000 1,200,000 300,000 1,800,000 Rental property Accumulated depreciation: rental property 1,000,000 1,300,000 (250,000) (100,000) (350,000) "Unrelated to regular business operations Determine Kim's property factors for the two states. The statutes of both States A and B provide that average historical cost of business property is to be included in the property factor.

37. Kim Corporation, a calendar year taxpayer, operates manufacturing facilities in States A and B. A summary of Kim's property holdings follows. Beginning of Year State A State B Total $ 300,000 $ 200,000 1,500,000 $ 500,000 4,000,000 Inventory Plant and equipment Accumulated depreciation: plant and equipment Land Rental property Accumulated depreciation: rental property 2,500,000 (1,000,000) (600,000) (1,600,000) 600,000 1,000,000 1,600,000 900,000 300,000 1,200,000 (200,000) (90,000) (290,000) End of Year State A State B Total $ 600,000 $ 400,000 2,800,000 Inventory $ 200,000 Plant and equipment 1,200,000 4,000,000 Accumulated depreciation: plant and equipment (1,200,000) (650,000) (1,850,000) Land 600,000 1,200,000 300,000 1,800,000 Rental property Accumulated depreciation: rental property 1,000,000 1,300,000 (250,000) (100,000) (350,000) "Unrelated to regular business operations Determine Kim's property factors for the two states. The statutes of both States A and B provide that average historical cost of business property is to be included in the property factor.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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