Albany, Inc Calculate Albany's Income Taxable in Each State

question 14

Multiple Choice

Albany, Inc. does business in states C andD. State C apportions income using an equally-weighted three-factor formula; state D uses an apportionment formula that double-weights the sales factor. Albany's before tax income is $3,000,000, and its sales, payroll, and property factors are as follows. $$\begin{array} { | l | r | r | } \hline &{ C } & { D } \\\hline \text { Sales factor } & 50 \% & 50 \% \\\hline \text { Payroll factor } & 40 \% & 60 \% \\\hline \text { Property factor } & 20 \% & 80 \% \\\hline\end{array}$$ Calculate Albany's income taxable in each state.

• A) State C, $1,100,000; State D, $1,800,000
• B) State C, $1,100,000; State D, $1,900,000
• C) State C, $1,200,000; State D, $1,800,000
• D) State C, $1,300,000; State D, $1,700,000

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Definitions:

Contra-Asset Account

A contra-asset account is an account used in the financial accounting to offset against an asset account on the balance sheet.

Accounts Receivable

This refers to the money owed to a company by its customers for goods or services delivered or used but not yet paid for.

Allowance for Doubtful Accounts

The allowance for doubtful accounts is a contra-asset account that estimates the amount of receivables that may not be collectible.

Future Transaction Value

The predicted or estimated financial value of a transaction that will occur at a later date, often used in forecasting and budgeting.