ExpertHard1 markMultiple Choice
CPA · Question 69 · Area V: Entity Taxation
A multi-state corporation has the following factors: Property 80% in State A; Payroll 50% in State A; Sales 50% in State A. State A uses an apportionment formula that double-weights the sales factor. What is the apportionment percentage for State A?
A multi-state corporation has the following factors: Property 80% in State A; Payroll 50% in State A; Sales 50% in State A. State A uses an apportionment formula that double-weights the sales factor. What is the apportionment percentage for State A?
Answer options:
A.
60%
B.
50%
C.
57.5%
D.
65%
How to approach this question
Double Weighted Sales: (Prop + Pay + Sales + Sales) / 4.
Full Answer
C.57.5%✓ Correct
With a double-weighted sales factor, the formula is (Property + Payroll + 2*Sales) / 4. (80 + 50 + 100) / 4 = 57.5%.
Common mistakes
Dividing by 3 instead of 4 when double-weighting.
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