Answer the tax question(s) listed in each of the following hypothetical cases.

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Writing Assignment 5Answer the tax question(s) listed in each of the following hypothetical cases. Where applicable, your analysis should be organized into the following sections: Facts, Tax Issues, Tax Sources, Tax Analysis, and Conclusion.Research Problem 1Joe L. Laser is a promising left-handed pitcher for the SIU baseball team. He has been drafted by the Chicago Cubs. I n 2018, he is offered two separate contracts by the Cubs. The first contract provides that he will be paid $1,000,000 as a bonus in 2018. The second provides that the Cubs will transfer $1,000,000 into a bank account in his name for withdrawal no earlier than 2020. He will also be paid the market rate of interest upon payment of the $1,000,000 in 2020. Laser accepts the second contract. Is the $1,000,000 payable to Laser in 2020 taxable to Loser and, if so, in what year? Write a memo to the tax files supporting your conclusion. Research Problem 2Everly Cansada has been charged with failure to file her 2017 federal Form 1040. As such, she has come to your office to seek your assistance. She wants to file her 2017 Form 1040 but believes the “reasonable cause” exception should apply. She was under a great deal of stress at work and her in personal life during the 2018 filing season. As a result, Everly developed a sleep disorder which was treated with a combination of pills and counseling.You prepare Everly’s 2017 Form 1040. She agrees to pay the tax and related interest but insists the failure-to-pay penalty does not apply as she will ill. She feels she should not be expected to meet the usual deadline for filing since she was ill. Please write a letter to Everly explaining whether she will be required to pay the failure-to-pay penalties or whether she meets the criteria to be exempted from the penalty. In a separate document provide the authority supporting your conclusion and explaining how you reached such conclusion. This does not need to be a tax memo in proper form. Research Problem 3Joy Joysen resides in Walla Walla, Washington. In 2014, Washington State law was amended to allow the legal selling of marijuana. Marijuana is classified as an illicit narcotic under federal law. In 2017, Joysen operated the House of Joy as a sole proprietorship which sold marijuana.The House of Joy also operated a Joy Room which promised that marijuana consumed therein would alleviate all medical woes. Gross sales were $100,000. Operating expenses other than cost of goods sold were $78,000. Cost of goods sold were $10,000. Assuming that Joysen is in a 28% tax bracket, what is her tax liability as a result of this business? Please write a letter to Joy explaining how to calculate her taxable income and tax liability. Write a memo to the tax files supporting your conclusion.

What is a bond indenture? What parties are usually associated with it?

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What is a bond indenture? What parties are usually associated with it? Explain why.

Discuss the general rules that govern S corporations.

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An S corporation is considered a flow-through business entity that has the advantages of both the corporation and proprietorship. Discuss the general rules that govern S corporations. What are some of the operational rules that effect various code provisions on S corporations? Go to www.irs.gov and provide a synopsis of the similarities and differences between S corporations and one other form of business.

Discuss how the bonus program at Kidder Peabody contributed to the fraud.

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As you have learned this week, effective management control systems align managers’ personal interests with those of the overall company. Such a system provides the procedures and policies ensure a firm’s employees can work to achieve the best possible results, and minimize the opportunities for personal gain and fraud. Two areas most vulnerable to the misalignment of individual employee interests are performance evaluation and compensation. According to a report by the Treadway Commission, the following pressures can lead to financial fraud:

Unrealistic budget pressures with emphasis on short-term results
Financial pressures that result from bonus compensation plans that depend upon short-term results
(Lanen, 2014, p.455)

If these issues are not adequately addressed within the Management Control System, the system itself can provide incentives to commit fraud.

Instructions

Read case study 12–55 about the fraud at GE’s Kidder Peabody Investment firm. The case is found at the end of chapter 12 in your textbook.

Please discuss the following questions in your initial post:

Suppose you were an accountant at Kidder Peabody and you realized the accounting system flaw. What would you do?
Discuss how the bonus program at Kidder Peabody contributed to the fraud.
Do you feel that the offer of GE managers to help “cover” the losses from Kidder Peabody were ethical?
Be sure to cite any sources that you use with APA. Wikipedia is not an acceptable source.CASE

(LO 12-3, 5, 7) 12-55. Business Environment, Performance Measures, Compensation, and Ethics
In the late 1980s, General Electric Company (GE), whose CEO at the time was Jack Welch, acquired Kidder Peabody, an investment banking firm founded in 1824. In 1991, Kidder hired a bond trader named Joseph Jett. Jett’s job was trading STRIPS, which are securities linked to U.S. Treasury bonds.
The trades work as follows. Assume you own a 20-year Treasury bond with a face value of $1,000 and an interest rate of 12 percent, payable semiannually. This bond entitles you to 40 payments (20 years × 2 payments per year) of $60 (= $1,000 × 12% × 1/2). For various reasons, some companies and individuals want the payment stream to follow a different pattern. It is possible to convert the single bond described above into 41 separate zero-coupon bonds. (A zero-coupon bond is one without an explicit interest rate and no payments before maturity.) The resulting bonds are called STRIPS (Separate Trading of Registered Interest and Principal of Securities). The reverse transaction—converting separate bonds into a coupon bond—is referred to as a RECON, or reconstitution of the security.
This transaction has been compared to going to the bank and changing a dollar bill for four quarters. This transaction was done with the Federal Reserve Bank (Fed). Kidder made money on the business through fees and trading profits associated with the inventory of bonds it kept for transactions. As you might expect, there should be no profit in the transaction with the Fed.
Although at first he struggled in his job, Jett was soon generating enormous profits and earning large bonuses. He was able to do this because of an error in the internal Kidder accounting system that recorded the transaction improperly. Because the error would eventually correct itself (as the interest payment date approached), Jett was forced to trade larger and larger volumes. At the time this was discovered, approximately 95 percent of Jett’s trades were with the Fed.
Jett earned a bonus of $2 million in 1992 and $9 million in 1993, in addition to being named Kidder’s “Employee of the Year.” In 1994, Jett was generating in one month the profit he earned for the entire year in 1992 and Kidder executives began to investigate. Jett was fired in April 1994 and GE was forced to take a $350 million pretax charge against earnings.

Lanen, William. Fundamentals of Cost Accounting. McGraw-Hill Higher Education (US), 2019. [ECPI].

Discuss the overall adequacy of controls used in each sub-system under review.

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Part 3: Internal Controls Analysis and Documentation, and Recommendations (2900 word)

3.1 Partial Control Matrix: include at least 7 existing control plans and any (“missing”) control plans for each subsystem examined. These control plans should relate to the “key” or “main” objectives of each of the relevant parts of the client’s sub-system under review.

As the case study will have some necessary constraints that will prevent you designing a perfect system, you will need to identify control weaknesses and inefficiencies inherent in your design and what recommendations or design changes you would suggest to improve the efficiency and effectiveness of the AIS, if some or all of the constraints are reduced.

3.2 Control Matrix Explanation: Describe how each control plan helps (or would help) achieve system goals.

3.3 Control Analysis: Discuss the overall adequacy of controls used in each sub-system under review. Discuss the efficiency and effectiveness of controls (if an operations or information system goal has no plan listed under it on your matrix, why not? Does an expensive control support a single goal? Is this appropriate, in your judgment? Are there control deficiencies in your system design due to cost effect constraints, software incompatibility with your preferred system etc.? If so why is this appropriate, in your judgment? Discuss the mix of preventive, detective, and corrective controls. Form a conclusion as to the quality of the controls, based on the system’s environment and user needs.

3.4 Managerial Recommendations for each sub-system under review: Go beyond a narrow control view to a broader look at how well the system achieves organisational goals, and how it might be incrementally or dramatically reengineered (e.g. by taking advantage of new technologies) to better achieve organisational goals, in the future.

If you recommend changes to your current system design and procedures, prepare a draft of the new procedure(s), and document how the system would change, using a data flow diagram or flow chart. If you recommend a new report, prepare a draft of that report. If you recommend purchase of new hardware or a new software package, indicate either a specific product recommendation, or list several viable options. If you recommend the status quo, justify your recommendation. This segment will complement the discussion of missing controls in part 3.1.

  • For this part, best example would be from page 30 to page 47 from the completed assignment from my friend.
  • Use that format to answer question 3.1 to 3.4 for each of the sub-system.
  • Billing & Account Receivable are together as one, Cash Receipt and Purchasing Process are individual.
  • Reference: 12 – 15 CDU Harvard referencing style (around 3-4 references for each sub-system)
  • For Question 3.4, design 3 new system flowcharts like in my friend’s completed assignment (Appendix 9, 10, 11). Your design will be different from my second member of the group who is doing the middle part of this assignment.

1.2 Executive Summary (no more than 200 words):

Your executive summary should provide an overview of the entire document and highlight a key message, such as actions you are urging that your client to take. There is no single format, but one appropriate way to organize an executive summary might be as follows:

Professional assignment. This should answer the following questions: (Who are you? What was your assignment? What tasks did your group perform?)

  • Purpose of the document (“This report describes our findings and recommendations…”)
  • Results (what your group observed/found)
  • Conclusions (your group’s assessment of the system’s strengths and weaknesses)
  • Recommendations

 

 

Discuss how cost-volume-profit (CVP) analysis and flexible budgeting can enable students to understand the different stages involved in starting up a business, projecting out results, and monitoring business performance

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Prior to beginning work on this discussion, please read the article A Case Method Approach of Teaching How Cost-Volume-Profit Analysis is connected to the Flexible Budgeting Process and Variance Analysis (Links to an external site.).

The authors, Machuga and Smith (2013), present in the article a multidisciplinary case-method approach to help students who want to start a successful business understand the steps necessary to achieve their desired profits using cost-volume-profit (CVP) analysis. The case-method emphasizes on the importance of CVP analysis and how it ties directly into the planning and control processes any management must take to start a potentially successful business.

After reading the aforementioned Machuga and Smith article, in an initial post of at least 200 words, discuss how cost-volume-profit (CVP) analysis and flexible budgeting can enable students to understand the different stages involved in starting up a business, projecting out results, and monitoring business performance (Machuga & Smith. 2013).

Discuss what is meant by forensic accounting. What are some ways in which it differs as a specialty from general accounting or auditing?

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  • Discuss what is meant by forensic accounting. What are some ways in which it differs as a specialty from general accounting or auditing? What are some of the specific functions and roles that forensic accountants perform? How does fraud investigation fit in as a sub-specialty?
  • Discuss the fraud triangle. What are the individual components and how do they work together? How does it play a part in fraud investigations? How can understanding it be used by organizations to discourage, help prevent, and discover fraud?
  • Why is internal control important to discourage, help prevent, and discover fraud? What are some elements of a good internal control system, and how do they work? What is meant by the concepts of “reasonable assurance” and “cost-benefit analysis” in the context of internal control?
  • What is the responsibility of auditors to uncover fraud in an audit of financial statements? How has it changed pre-2002 (pre-Enron and the other related frauds) versus subsequent periods and the adoption of SAS99? How does it differ from a special purpose audit of internal controls or fraud investigation?
  • Provide an overview of what is meant by IT Security Assessment. What is the overall objective and how is it achieved and assessed?
  • How can systems be designed to prevent and detect fraud? How can whistle-blower programs and hotlines be part of the process, and what is needed to maximize their effectiveness? What about other things like audits and system controls? What’s meant by the concept of “minimizing the total fraud cost equation?”
  • Describe and discuss the Fraud Engagement Process. What are the steps, what do they involve, and why is each one important?

Identify a company that you believe would use job order costing and another company that you believe would use process costing.

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My classmate responded to the following: identify a company that you believe would use job order costing and another company that you believe would use process costing. Identify a third company that uses activity-based costing allocations. Discuss why each might use the method you identified with them. Compare and discuss the similarities and differences you see in the companies. You are to write a reply to my classmate if I agree or disagree with their findings.

Discuss the benefits and challenges reported in the literature about the adoption of IFRSs in your chosen country.

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  1. Choose a country that has adopted IFRSs (i.e. global accounting standards) for at least 3 or more years, as revealed in the accounting literature, and discuss the following:
  2. In what year did the country adopt IFRSs?
  3. Were the IFRSs introduced all together (at once), or gradually into the local accounting standards of your chosen country? Explain the possible reason.

III. Discuss the benefits and challenges reported in the literature about the adoption of IFRSs in your chosen country.

  1. Choose a publicly listed company from your chosen country above that you can access their annual report, including financial statements and notes to the accounts. (e.g. Choose a company that is listed in the Australian Securities Exchange (ASX) if you chose Australia; or Hong Kong Exchange if you chose Hong Kong etc.).

Find and download the financial statements for two (2) years as follows:

  • 1 st financial statement – Choose the year immediately before IFRSs adoption and
  • 2 nd financial statement – Choose either 2019 or 2018 only. Compare the two (2) years’ financial statements and accompanying notes to the accounts selected above, and discuss the following:
  1. Identify and discuss any remarkable changes to the disclosures relating to any two of the following financial aspects:
  • Non-Current Assets
  • Intangible Assets
  • Leases • Employee Benefits
  1. Express your opinion about the usefulness of the new format of disclosures compared to the disclosures at the pre-adoption of IFRSs. Include examples to support your opinion. Page 3 of 10 HI6025 Accounting Theory and Current Issues

Part B

  1. Discuss key trends in Corporate Social Responsibility (CSR), as reviewed in the literature in the past 5 years. (Word limit: approx. 500 – 800 words).
  2. Choose one company listed on the ASX and obtain its latest annual report (incl. financial statements). Compare and contrast the extent of CSR reporting by your chosen company with your review of the literature (above in 1.), by answering the following questions:
  3. Evaluate the company’s extent of CSR reporting. (Include in your discussion, specific evidence of CSR disclosures, e.g. environmental etc.).
  4. Using one relevant accounting theory (e.g. PAT, Legitimacy Theory, Stakeholder Theory), explain why particular CSR disclosures were made by your chosen company.

III. In your opinion, is there scope for improvement in CSR reporting by your company? Explain with two specific examples.

  1. Based on your findings, provide two (2) recommendations to the Australian financial reporting regulators about the future of CSR reporting that will guide Australian public entities in the future.

Why do you think that your supervisor believes the Coast Guard job will be performed at Long Beach?

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As in all accounting areas, there is an opportunity to manipulate the data in a costing system. Managers want the data to make their departments look profitable. However, sometimes the data is not favorable and managers attempt to hide the facts. Managers (or the accountants they influence) can accomplish this in few ways. As a cost accountant, you may encounter the following scenarios, so it is important to understand what they are and how they affect the firm’s bottom line.

Managers should avoid following unethical actions:

Misstate the Stage of Completion. Managers need to know how the far along in the production process a project is and how the estimated costs are matching up with this percentage of completion. For example, if a project is 75% complete, but costs are at nearly 100% of the projection, then managers will need to report that costs are going to be higher than expected. Managers can forestall this information by reporting that the project is further along than it is, thereby matching the costs incurred with the fictitious stage of completion.
Charge Costs to the Wrong Job. To avoid cost overruns, managers can allocate costs from projects that are in danger of exceeding cost estimates to those jobs that are not. This cheats those customers that are paying on a cost-plus basis, and is illegal because it constitutes fraud.
Misrepresent the Cost of a Job. Managers can misstate the cost of a job as higher than it is in order to pad the bottom line. Another method would be to allocate overhead costs in the way that provides the most favorable results, rather than using an allocation base that truly represents how the resources were used.
(Lanen, 2015, p. 251–252).

Instructions

Please read the following scenario:

San Mateo Shipyards completes work for both the U.S. Coast Guard and private shipping companies. San Mateo’s major business is repairing ships, which it does at two company dry docks referred to by the names of the local towns: Downey and Long Beach.

Data on operations and costs for the two dry docks are below:
Downey Long Beach
Overhead Costs
$30,000,000
$85,000,000
Direct Labor hours
250,000
250,000
San Mateo is about to start two jobs, one for the Coast Guard under a cost-plus contract and one for a private shipping company for a fixed fee. Both jobs will require the same number of labor hours. You have been asked to prepare some costing information. Your supervisor tells you that she is sure the Coast Guard job will be done at Long Beach, and that the private job will be done at Downey.

Compute the overhead rate for both shipyards and include this in your initial post. Also discuss the following questions:

Why do you think that your supervisor believes the Coast Guard job will be performed at Long Beach?
Is the choice of production location ethical? Why, or why not?