Simpkin Corporation owns manufacturing facilities in States A,B,and C.A uses a three-factor apportionment formula under which the sales,property and payroll factors are equally weighted.B uses a three-factor apportionment formula under which sales are double-weighted.C employs a single-factor apportionment factor,based solely on sales.
Simpkin's operations generated $1,000,000 of apportionable income,and its sales and payroll activity and average property owned in each of the three states is as follows.
Simpkin's apportionable income assigned to B is:

Question

Simpkin Corporation owns manufacturing facilities in States A,B,and C.A uses a three-factor apportionment formula under which the sales,property and payroll factors are equally weighted.B uses a three-factor apportionment formula under which sales are double-weighted.C employs a single-factor apportionment factor,based solely on sales.
Simpkin's operations generated $1,000,000 of apportionable income,and its sales and payroll activity and average property owned in each of the three states is as follows.
 Simpkin's apportionable income assigned to B is:

Quizplus · Accepted Answer

To determine Simpkin Corporation's apportionable income assigned to State B, we use the three-factor apportionment formula in which sales are double-weighted. The calculation is as follows:

Sales factor: 
Total Sales = $4,000,000 ($2,000,000 in State A + $1,000,000 in State B + $1,000,000 in State C)
Sales in State B = $1,000,000
Sales Factor = (2 x $1,000,000) / $4,000,000 = 0.5

Property Factor: 
Total Property = $15,000,000 ($5,000,000 in State A + $5,000,000 in State B + $5,000,000 in State C)
Property in State B = $5,000,000
Property Factor = $5,000,000 / $15,000,000 = 0.33

Payroll Factor: 
Total Payroll = $3,000,000 ($1,500,000 in State A + $500,000 in State B + $1,000,000 in State C)
Payroll in State B = $500,000
Payroll Factor = $500,000 / $3,000,000 = 0.1667

Weighted Factor: 
Sales factor (0.5) + (Property factor (0.33) + Payroll Factor (0.1667)) / 2 = 0.6658

Apportionable income assigned to State B: 
0.6658 x $1,000,000 = $665,800

Therefore, the answer is not provided.

Simpkin Corporation Owns Manufacturing Facilities in States A,B,and C