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:

Interval Measure

A financial metric used to determine a company’s ability to meet its short-term obligations without needing additional cash inflows.

Operating Expenses

The costs associated with running a company’s day-to-day operations, such as rent, utilities, and wages.

Current Assets

Assets that are expected to be converted into cash or used up within one year or one business cycle, whichever is longer.

Equity Multiplier

The equity multiplier is a financial leverage ratio that measures the proportion of a company's total assets financed by shareholders' equity, used to evaluate financial risk.