Assume the same facts as Problem 3, except both states use a three-factor formula where sales are double weighted. For the property factor, State 1 uses book value, while State 2 uses net book value. Neither state follows UDITPA with respect to rents.

Problem 3,

Pamela Corp has operations in States 1 and 2. Its operations for the year were:

Calculate the apportionment factors for States 1 and 2. Assume that State 1 uses a three-factor apportionment formula, in which sales, property (net), and payroll are equally weighted. Assume that State 2 uses a single-factor formula based on sales. Only State 1 follows UDITPA with respect to rent expense.

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State 1 Sales $600,000 State 2 $150,000 Payroll 200,000 50,000 Property: Avg. Cost 250,000 400,000 Avg. Accum. Depr. 150,000 250,000 Rent expense 5,000 17,500