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Exercise 16-6 (Algorithmic) (LO. 6) Vogel Corporation owns two subsidiaries. Song, located in State A,...

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Exercise 16-6 (Algorithmic) (LO. 6) Vogel Corporation owns two subsidiaries. Song, located in State A, generated $829,500 taxable income this year. Bird, located in State B, generated a $165,900 loss for the period. a. Determine Song's taxable income in States A and B, assuming that the subsidiaries constitute independent corporations under the tax law. If the subsidiaries are taxed as independent corporations, Song pays only State A tax on $ of income. b. How does your answer change if the companies constitute a unitary business? If the companies constitute a unitary business, the incomes, as well as the apportionment factors ; of the two entities are combined. As a result, $ is apportioned to unitary States A and B. Feedback Check My Work The unitary theory was developed in response to the early problems that states faced in attrib among the states in which the business was conducted. Originally, this theory was applied to multiple operating divisions within a single company. Over the years, however, the concept has reporting of certain affiliated corporations, including those outside the United States

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