Flip Corporation Operates in Two States, as Indicated Below ​
* Excess Warehouse Space, Seasonal Rental to a Competitor

question 23

Essay

Flip Corporation operates in two states, as indicated below.All goods are manufactured in State A.Determine the sales to be assigned to both states to be used in computing Flip's sales factor for the year.Both states follow the UDITPA and the MTC regulations in this regard. $$\begin{array} { l r r } & \text { State A } & \text { State B } \\\text { Gross sales to purchasers in state } & \$ 420,000 & \$ 360,000 \\\text { Sales returns } & 9,000 & 11,000 \\\text { Discounts allowed } & 21,000 & 31,000 \\\text { Rental income } & 60,000 * & 25,000 * *\end{array}$$ ​
* Excess warehouse space, seasonal rental to a competitor.
** Land held for speculation.

---

Definitions:

Undisclosed Principal

A person who is represented in a transaction by an agent but whose identity is not revealed to the third party involved.

Agent's Authority

Refers to the powers granted to an agent by the principal, enabling the agent to act on behalf of the principal in legal or business matters.

Apparent Authority

A situation where a reasonable third party would understand that an agent had the authority to act, even if the agent did not have such authority.

Principal

The original sum of money borrowed in a loan, or the amount of the investment, excluding any interest or profit.