Flip Corporation Operates in Two States, as Indicated Below

question 90

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.
State A State B
Gross sales to purchasers in state $400,000 $350,000
Sales returns 9,000 11,000
Discounts allowed 21,000 31,000
Carrying charges collected back from customers, separately stated 20,000 10,000
Rental income 60,000 * 25,000 **
* Excess warehouse space, seasonal rental to a competitor.
** Land held for speculation.

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