more_on_property_solution

more_on_property_solution - formula for each state. State F...

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Solution : More on the property factor Lawrence Corporation has nexus in State F and State G. State F uses a three factor apportionment formula under which sales, property (average net book value), and payroll are equally weighted. In addition State F has adopted the UDITPA with respect to the inclusion of rent payments in the property factor. State G uses a three factor apportionment formula under which sales, property (average net book value), and payroll are equally weighted. Lawrence’s property activities are summarized below: State F State G Property January 1 December 31 January 1 December 31 Historical cost 450,000 550,000 280,000 320,000 Accumulated depreciation (275,000) (325,000) (95,000) (105,000) Rent expense 10,000 25,000 Required : Compute the property factor that Lawrence would use in their apportionment
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Unformatted text preview: formula for each state. State F State G Property January 1 December 31 January 1 December 31 Historical cost 450,000 550,000 280,000 320,000 Accumulated depreciation (275,000) (325,000) (95,000) (105,000) Rent expense 10,000 25,000 State F Average cost 500,000 300,000 Less: Average accumulated depreciation (300,000) (100,000) Average book value 200,000 200,000 Annual rent 10,000 25,000 UDITPA factor 8 8 Rent value 80,000 200,000 Total 280,000 400,000 State F's property factor 41.18% State G Average cost 500,000 300,000 Less: Average accumulated depreciation (300,000) (100,000) Average book value 200,000 200,000 State G's property factor 50.00% Total payroll factor State F's payroll factor 41.18% State G's payroll factor 50.00% 91.18%...
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