Question: Legends Corporation owns and operates two manufacturing facilities, one in State A and the other in State B. Due to a temporary decline in sales,

Legends Corporation owns and operates two manufacturing facilities, one in State A and the other in State B. Due to a temporary decline in sales, Legend has rented 25% of its State A facility to an unaffiliated corporation. Legend generated $200,000 net rent income and $1,400,000 income from manufacturing. Both states classify the rent income as allocable (nonapportionable) income. By applying the statutes of each state, Legends determines that its apportionment factors are .70 for A and .30 for B.

How much income is subject to tax in:

a. State A?

b. State B?

Step by Step Solution

★★★★★

3.38 Rating (164 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

The formula of Exhibit 161 suggests the following results a Income subj... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

527-L-B-L-C (328).docx

120 KBs Word File

Students Have Also Explored These Related South Western Federal Taxation Questions!

Joker Corporation owns and operates two facilities that manufacture paper products. One of the facilities is located in State D, and the other is located in State E. Joker generated $3.2 million of...

Logan Corporation owns and operates three sawmills that make lumber for building homes. The operations consist of cutting logs in the forest, hauling them to the various sawmills, sawing the lumber,...

Effective financial statement analysis requires an understanding of a firms economic characteristics. The relations between various financial statement items provide evidence of many of these...

Exercise 24-21 (Algorithmic) (LO. 1, 3, 4) Legends Corporation owns and operates two manufacturing facilities, one in State A and the other in State B. Due to a temporary decline in sales, Legends...

Exercise 24-21 (Algorithmic) (LO. 3, 4) Legends Corporation owns and operates two manufacturing facilities, one in State A and the other in State B. Due to a temporary decline in sales, Legends has...

Azure Corporation owns and operates two manufacturing facilities, one in State X and the other in State Y. Due to a temporary decline in the corporation's sales, Azure has rented 20% of its Y...

What happens to the premium you paid for the above option in the event you decide to let the option expire unexercised? What happens to this amount in the event you decide to exercise the option?

A narrowband signal has a bandwidth of 10 kHz centered on a carrier frequency of 100 kHz. It is proposed to represent this signal in discrete-tune form by sampling its in- phase and quadrature...

Forward curvature leading to a swayback posture is known as: Lordosis Kyphosis Scoliosis Anikylosis

Inventoriable Costs Presented below is a list of items that may or may not be reported as inventory in a companys December 31 balance sheet. 1. Goods sold on an installment basis (bad debts can be...

Inventoriable CostsPerpetual Bradford Machine Company maintains a general ledger account for each class of inventory, debiting such accounts for increases during the period and crediting them for...

Determining Merchandise Amounts?Periodic Two or more items are omitted in each of the following tabulations of income statement data. Fill in the amounts that are missing. 2009 2010 2011 $290.000...

Purchases Recorded Net Presented below are transactions related to Guillen, Inc. May 10 Purchased goods billed at $20,000 subject to cash discount terms of 2/10, n/60 11 Purchased goods billed at...

Naylor Company has the following information available for September 2012. Unit selling price of video game consoles ........ $ 400 Unit variable costs .................. $ 270 Total fixed costs...

Have LBOs been profitable in recent years?

What is a partner's capital account? Describe how a partner's ending capital account balance is determined.

Describe the three limitations that apply to the deductibility of a loss from a partnership. In what order are these limitations applied?

When is partnership income subject to self-employment tax or the net investment income tax by an individual partner?

Please read question properly The corporate charter of Maine Yacht Corporation allows the issuance of a maximum of 3,000,000 shares of $1 par value common stock. During its first three years of...

Occasionally you may encounter the expression social intelligence. In the words of one of its modern proponents, it is the ability to get along well with others and to get them to cooperate with you....

value 10.00 points Problem 9-5 Calculating Depreciation [LO 2] A piece of newly purchased industrial equipment costs $1,040,000 and is classified as seven-year property under MACRS. The MACRS...