Exercise 16-6 (Algorithmic) (LO. 6) Vogel Corporation owns two subsidiaries. Song, located in State A, generated $945,000 taxable income this year. Bird, located in State B, generated a $189,000 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 $ of income. b. How does your answer change if the companies constitute a unitary business? If the companies constitute a unitary business, the incomes, as well as the apportionment factors combined. As a result, $ is apportioned to unitary States A and B. , of the two entities are Feedback Check My Work The unitary theory was developed in response to the early problems that states faced in attributing the income of a multistate business among the states in which the business was conducted. Originally, this theory was applied to justify apportionment of the income of multiple operating divisions within a single company. Over the years, however, the concept has been extended to require the combined reporting of certain affiliated corporations, including those outside the United States