Calv 3

Vogel Corporation owns two subsidiaries. Song, located in State A, generated $582,000 taxable income this year. Bird, located in State B, generated a $116,400 loss for the period.

a. Determine Song's taxable income in States A and B, assuming that the subsidiaries constitute independent corporations under the tax law. If the subsidiaries are taxed as independent corporations, Song pays

only State A

tax on $fill in the blank 2 of income.

b. How does your answer change if the companies constitute a unitary business? If the corporations constitute a unitary business,

the incomes, as well as the apportionment factors

, of the two entities are combined. As a result, $fill in the blank 4 is

apportioned to

unitary States A and B.