Oldham Inc. conducts 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 4.5 percent, and State N's corporate tax rate is 7 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 $3,000 800 900 Total taxable income subject to apportionment Apportionment percentage State taxable income Tax rate State tax Required: Oldham's before-tax income was $3 million. Compute Oldham's State M and State N tax if State N uses an apportionment formula in which the sales factor is double-weighted. (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. Enter your answers in dollars and not in millions or thousands of dollars.) $ State N $7,500 1,200 1,000 > Answer is complete but not entirely correct. State M 3,000,000 $ 38.6467 115,940,100 $ $ Total $10,500 $ 2,000 1,900 4.500 x 521,730,450 $ State N 3,000,000✔✔ 61.3533 x 184,059,900 7.00 X 1,288,419,300

Oldham Inc. conducts 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 4.5 percent, and State N's corporate tax rate is 7 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 $3,000 800 900 Total taxable income subject to apportionment Apportionment percentage State taxable income Tax rate State tax Required: Oldham's before-tax income was $3 million. Compute Oldham's State M and State N tax if State N uses an apportionment formula in which the sales factor is double-weighted. (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. Enter your answers in dollars and not in millions or thousands of dollars.) $ State N $7,500 1,200 1,000 > Answer is complete but not entirely correct. State M 3,000,000 $ 38.6467 115,940,100 $ $ Total $10,500 $ 2,000 1,900 4.500 x 521,730,450 $ State N 3,000,000✔✔ 61.3533 x 184,059,900 7.00 X 1,288,419,300

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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