Oldham, Incorporated 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 $ 3,070 1,300 1,460 Total taxable income subject to apportionment Apportionment percentage State taxable income Tax rate State tax State N $ 8,310 1,610 1,660 Required: Oldham's before-tax income was $5.30 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. 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 $ 11,380 2,910 3,120 State M State N I.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Question

Subject: accounting 

Oldham, Incorporated 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
$ 3,070
1,300
1,460
Total taxable income subject to apportionment
Apportionment percentage
State taxable income
Tax rate
State tax
State N
$ 8,310
1,610
1,660
Required:
Oldham's before-tax income was $5.30 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.
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
$ 11,380
2,910
3,120
State M
State N
I.
Transcribed Image Text:Oldham, Incorporated 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 $ 3,070 1,300 1,460 Total taxable income subject to apportionment Apportionment percentage State taxable income Tax rate State tax State N $ 8,310 1,610 1,660 Required: Oldham's before-tax income was $5.30 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. 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 $ 11,380 2,910 3,120 State M State N I.
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