Pamela Corp has operations in States 1 and 2. Its operations for the year were: (15pts)

State 1 State 2

Sales 800,000 $250,000

Payroll 200,000 50,000

Property: Avg. Cost 350,000 400,000

Avg. Accum. Dep 150,000 250,000

Rent expense 5,000 17,500

1. 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 based on sales. Only State 1 follows UDITPA with respect to rent expense. how to include rent in state 1? Do we need to include rent for the average of the apportionment factor?

2. Calculate the apportionment factors Assume the same facts, 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. Only State 2 follows UDITPA with respect to rents. how to calculate double-weighted factor? Does state 2 need rent expense for apportionment factor?

3. Calculate the apportionment factors Assume the same facts, except both States use a single-sale factor formula. For the property factor, State 1 and State 2 uses net book value. Neither State follows UDITPA with respect to rents.

Answer rating: 100% (QA)

Lets address each question step by step 1 ThreeFactor Apportionment Formula State 1 and SingleFactor Apportionment Formula State 2 State 1 For State 1 ... View the full answer