Problem: 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.
2. 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.
3. 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.