General Corporation Is Taxable in a Number of States

question 186

Multiple Choice

General Corporation is taxable in a number of states. This year, General made a $100,000 sale from its A headquarters to the State B office of the FBI, the Federal Bureau of Investigation. In which state(s) will the sale be included in the sales factor numerator?

• A) $0 in A and $0 in B.
• B) $50,000 in A, with the balance exempted from other states' sales factors under the Colgate doctrine.
• C) $100,000 in A.
• D) $100,000 in B.

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Definitions:

Credit Terms

Conditions under which credit is extended by a seller to a buyer, detailing the repayment period, interest rate, and other terms of payback.

Merchandise

Goods bought and sold by businesses, typically in the retail sector.

Account

A record of increases and decreases in specific asset, liability, or owner’s equity items.

Freight

Costs associated with the transportation of goods, often recognized separately on financial documents for accounting purposes.