Sales representative Jones is based in Utah, where the operating plants and corporate headquarters of her employer also are located. She visits customers in Colorado for a day, soliciting orders for the seashells that she sells. The orders are approved in Utah, and the shells are shipped from Oregon within a week. Are these sales subject to the Colorado corporate income tax? Question 12 LO.6 About 20 states apply a unitary system of business income taxation. a. Explain why these states are attracted to the unitary theory and a combined reporting scheme of multistate income taxation. Problem 24 LO.1 Use Figure 24.1 to compute Beta Corporation's State F taxable income for the year. Addition modifications $12,000 Allocated income (total) 15,000 Allocated income (State F) 5,000 Allocated income (State G) 10,000 Tax credits 50 Federal taxable income 90,000 Subtraction modifications 15,000 Appointment percentage 40% Tax rate 5% Problem 33 LO.5 State E applies a throwback rule to sales, while State F does not. State G has not adopted an income tax to date. Orange Corporation, headquartered in E, reported the following sales for the year. All of the goods were shipped from Orange's E manufacturing facilities. Determine its sales factor in those states. Comment on Orange's location strategy, using only your tax computations. Customer Customer's Location This Year's Sales ShellTell, Inc. E $ 75,000,000 Tourist, Ltd. F 40,000,000 PageToo Corp. G 55,000,000 U.S. Department of interior All 50 states 35,000,000 Total $ 205,000,000 Problem 40 LO.7 Hernandez which has been an S corporation since inception, is subject to tax in States Y and Z. On schedule K of its federal form 1120S, Hernandez reported ordinary income of $500,000 from its business, taxable interest income of $10,000, capital loss of $30,000 and $40,000 of dividend income from a corporation in which it owns 30%. Both states apportion income by use of a three-factor formula that equally weights sales, payroll, and the average cost of property; both states treat interest and dividends as business income. In addition, both Y and Z follow Federal provisions with respect to the determination of taxable income for a corporation. Y recognizes S states, but Z does not based on the following information, write a memo to the shareholders of Hernandez detailing the amount of taxable income on which Hernandez will pay tax in Y and Z. Hernandez corporate offices are located at XXXX XXXXXXXXX XXXXXX, Koopville, KY 47697 State Y State Z Sales $1,000,000 $800,000 Property (average cost) 500,000 100,000 Payroll 800,000 200,000

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