Khan, Inc., a domestic corporation, reports $650,000 of gross income and an $80,

Question

Khan, Inc., a domestic corporation, reports $650,000 of gross income and an $80,000 expense, all related to real estate activities.

Determine the expense allocation and apportionment using gross income as a basis.

When required, round any division to three decimal places. Use rounded amounts in subsequent computations.

Foreign
Gross Income

U.S.
Gross Income

Allocation

Apportionment
Foreign

Apportionment
U.S.

Foreign
Gross Income

U.S.
Gross Income

Allocation

Apportionment
Foreign

Apportionment
U.S.

Sales income $500,000 $85,000 $ $ $ Rental Income $50,000 $15,000 $ $ $ $550,000 $100,000 $80,000 $ $

Explanation / Answer

Foreign Gross Income U.S Gross Income Allocation Apportionment Foreign Apportionment U.S Sales Income 500000 85000 72000 (80000*(500000+85000))/650000 61538.462 (72000*500000/585000) 10461.538 (72000*85000/585000) Rental Income 50000 15000 8000 (80000*(50000+15000))/650000 6153.846 (8000*50000/65000) 1846.154 (8000*15000/65000) 550000 100000 80000 67692.308 12307.692

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