The Bartonia Company manufactures grommets in Georgia and sell them directly to industrial customers in Georgia, Florida,
Question:
1. Suppose each state uses a simple three-factor apportionment formula. What share of company profit would each state tax?
2. Make that same calculation, but suppose each state double-weights the sales factor.
3. Make the calculation with each using only the sales factor.
4. Assume now that GA adopts the single sales factor and the other states use double-weighted sales.
5. Assume now that South Carolina adopts the single sales factor and the other states use double-weighted sales.
6. Explain why manufacturing firms in some states have pressed for use of the single sales factor. Why have nationwide business organizations not made this switch an issue?
Please answer all parts.
Step by Step Answer:
Accounting Principles Part 2
ISBN: 978-1118306796
6th Canadian edition Volume 1
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Kinnear, Joan E. Barlow