Question

Balboa Corporation activities for the year are summarized below:

Addition modifications $29,000
Allocated income (total) 25,000
Allocated income (State F) 3,000
Allocated income (State G) 22,000
Apportionment percentage 40%
Credits 800
Federal taxable income 90,000
Subtraction modifications 15,000
Tax rate 5%

Compute Balboa Corporation's State F taxable income and net tax liability for the year.

Answer 1

Answer:

Balboa Corporation's State F taxable income and net tax liability for the year is $930

Explanation:

Balboa Corporation’s State F taxable income for the year

Federal taxable income                                        $90,000

Addition modifications                                          $29,000

Subtraction modifications                                     -$15,000

Net Federal Taxable Income                                 $104,000

Allocated income (total)                                         -$25,000

State Taxable Income                                            $79,000

Apportionment percentage                                     40%

                                                                                $31,600

Allocated income (State F)                                     $3,000

Income Allocated to State F                                  $34,600

Tax rate                                                                        5%

                                                                                 $1,730

Less: Tax Credits                                                     -$800

State F taxable income for the year                        $930