Question 1

A multistate corporation has the following factors: Sales in State A $500,000; Total Sales $1,000,000. Payroll in State A $100,000; Total Payroll $1,000,000. Property in State A $200,000; Total Property $1,000,000. State A uses a double-weighted sales factor apportionment formula. What is the apportionment percentage for State A?

Accepted Answer

1. Calc Factors: Sales 50%, Payroll 10%, Property 20%. 2. Double Weight Sales: 50 + 50 + 10 + 20 = 130. 3. Divide by 4 (Sales x2 + Pay + Prop): 130 / 4 = 32.5%.

Question 2

What mistakes do candidates make on this CPA question?

Accepted Answer

Dividing by 3 instead of 4 when using double-weighted sales.

How to approach this question

Full Answer

Common mistakes

Practice the full CPA REG Practice Exam 3

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