oducts business In State M and Statel
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Subject: accounting

Transcribed Image Text:gonducts business In State M and State N, which both use the UDITPA three-factor formula to apportion Income.
State M's corporate tax rate is 3.50 percent, and State N's corporate tax rate is 6.50 percent. This year, Oldham had the following
sales, payroll, and property (in thousands of dollars) in each state:
Gross receipts from sales
Payroll expense
Property costs
State M
$ 4,300
2,100
2,200
Total taxable income subject to apportionment
Apportionment percentage
State taxable income
Tax rate
State tax
State N
$ 8,800
2,500
2,300
Required:
If Oldham's before-tax Income was $4.3 million, compute Its State M and State N tax.
Note: Round all apportionment factors to 4 decimal places, e.g., 47.15% would be 0.4715. Enter "Apportionment percentage" and
"Tax rate" In decimals and not in percentage. Do not round any Intermediate values. Enter your answers in dollars and not in
millions or thousands of dollars.
Total
$ 13,100
4,600
4,500
State M
State N
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