azharul97

Question 3
Name and describe the five elements of internal control.

Question 5
(a) If the receivable turnover is 20, how many days are thereceivables outstanding, on the average?

(b) What are the three classifications of receivables?

Question 6
There are four steps that are involved in the closing process. Whatare the four journal entries that are required in closing thetemporary accounts?

Question 7
What are the four basic categories or types of accounts thatrequire adjusting entries at the end of an accounting period?

Need these ratios from the following GL.

1. Prepare the Adjusting entries A-F. a. Insurance expiredduring June is $150.

b. Supplies on hand on June 30 are $1,020.

c. Depreciation of office equipment for June is $500.

d. Accrued receptionist salary on June 30 is $120.

e. Rent expired during June is $1,500.

f. Unearned fees on June 30 are $2,000.

2. Prepare an income statement, a statement of owner's equity,and a balance sheet.

3. Journalize and Post the adjusting entries.

4. Journalize and post the closing entries. (Income Summary isaccount #33 in the chart of accounts.)

5. Prepare a post-closing trial balance.

You are an accountant for an electric company and you arerecording closing entries. In a brief essay, relate the steps inrecording closing entries. Also outline which accounts are affectedand which accounts are not affected by closing entries. What twopurposes are accomplished by recording closing entries?

What are the financial statement effects of issuing bonds?

What is the financial statement impact of issuing stock compared to issuing bonds?

Write a persuasive speech on why America needs more gun control

1. After graduating from Berkeley College and passing your CPAexam, you have opened up an accounting firm that offers tax andconsulting services to clients. You have just picked up a newclient who is very anxious about his expenses. The client considershis in house accounting services to be too high and he feels thathe could save some time and money in that area by telling hisaccounting staff not to do closing entries. It is your job, in thisdiscussion, to explain to your new client the importance of doingthe closing entries and why they are worth doing.

2. Please tell us about permanent and temporary accounts. Pleaselet us know which financial statement contains the permanentaccounts and which one contains the temporary accounts. Please listthe 4 closing entries.

Don't forget that you are required to provide an APA formattedreference for your initial post. When responding to classmates,please include information from Chapter 4 in your eText regardingthe accounting cycle and/or the closing entries.

Please remember that you must enter at least 3 meaningful poststo this discussion board.

You are an accountant for an electric company and you are recording closing entries. In a brief essay, relate the steps in recording closing entries. Also outline which accounts are affected and which accounts are not affected by closing entries. What two purposes are accomplished by recording closing entries?

Need help with this paper any suggestions? Please help.

In accounting, what accounts are affected by closing entries?What accounts are not affected?

Place the letter of the report type that best fits the languagepresented on the answer line. Each report type may be used morethan once or not at all, but each item has only one best answer. Ifyou think more than one answer may apply, choose the BESTanswer.

a. Explanatory language

b. Unqualified opinion with qualification forGAAP departure

c. Qualified opinion

d. Qualified opinion because of a scopelimitation

e. Qualified opinion because of an ICFRdeficiency

f. Qualified opinion because of a GAAPdeparture

g. Qualified opinion because of a change inaccounting standards

h. Qualified opinion because of lack ofindependence

i. Qualified opinion plus explanatorylanguage

j. Qualified opinion for dual dating

k. Qualified opinion to reflect need to rely onanother auditor

l. Disclaimer of opinion because of a scopelimitation

m. Disclaimer of opinion because of lack ofindependence

n. Adverse opinion

o. Combined report with unqualified opinions onfinancial statements and ICFR

_____1. In our opinion, the Company did notmaintain, in all material respects, effective internal control overfinancial reporting as of March 31, 2010, based on criteriaestablished in Internal Control—Integrated Framework issued by theCommittee of Sponsoring Organizations of the Treadway Commission(COSO)…

_____2. In addition, as discussed in Note 9 tothe consolidated financial statements, effective January 1, 2007,the Company adopted Accounting for Uncertainty in IncomeTaxes, FASB ASC 740-10.

_____3. We are not independent with respect toXYZ Company, and the accompanying balance sheet as of December 31,19X1, and the related statements of income, retained earnings, andcash flows for the year then ended. …

_____4. …because of the effects of the mattersdiscussed in the preceding paragraphs, the financial statementsreferred to above do not present fairly. …

_____5. We have also audited in accordance withthe standards of the Public Company Accounting Oversight Board(United States) the company’s internal control over financialreporting as of December 31, 2010, based on criteria established inInternal Control-Integrated Framework issued by the Committee ofSponsoring Organizations of the Treadway Commission and our reportdated August 6, 2011 expressed an unqualified opinion thereon.

_____6. … except for the effects of suchadjustments, if any, as might have been determined to benecessary…

_____7. The accompanying financial statementshave been prepared assuming that ABC, Inc. will continue as a goingconcern. As more fully described in Note 1, the Company filed avoluntary petition for reorganization under Chapter 11 of theUnited States Bankruptcy Code on January 29, 2010, which raisessubstantial doubt about the Company’s ability to continue as agoing concern. Management’s plans in regard to this matter are alsodescribed in Note 1.

_____8. The Company did not make a count of itsphysical inventory…The Company’s records do not permit theapplication of other auditing procedures. …the scope of our workwas not sufficient to enable us to express. …

_____9. In our opinion, except for the omissionof the information discussed in the preceding paragraph….

_____10. In our opinion, based on our auditsand the report of other auditors, the financial statements referredto above present fairly, in all material respects…

_____11. In our opinion, the financialstatements referred to above present fairly, in all materialrespects, the financial position of W Company as of December 31,2010 and 2009…. Also in our opinion, W Company maintained, in allmaterial respects, effective internal control over financialreporting as of December 31, 2010. …

_____12. We did not audit the financialstatements of B Company, a wholly-owned subsidiary, whichstatements reflect total assets and revenues constituting 20percent and 22 percent, respectively of the related consolidatedtotals. … In our opinion, based on our audit and the report of theother auditors, the consolidated financial statements referred toabove present fairly. …

_____13. In our opinion…the financialstatements present fairly… Dated February 16, 2010, except for Note16, as to which the date is March 1, 2010.

_____14. Except as discussed in the followingparagraph, we conducted our audits in accordance with auditingstandards…. In our opinion, except for the effects…the financialstatements present fairly. …

_____15. As discussed in Note X to thefinancial statements, the 20X2 financial statements have beenrestated to correct a misstatement.

In order for individuals to rely on the financial informationfor making important financial decisions, the information itselfmust have integrity: it must be complete, factual and without bias.The integrity of accounting information is enhanced in severalways. First, the information is prepared in accordance withacceptable standards set forth by the accounting industry. Theseinclude standards for the preparation of the accountinginformation, an internal control structure, and audits of thefinancial statements by independent outside audit firms. Second,professional accounting organizations play a role in adding to theintegrity of accounting information by establishing code of conductfor their members. Lastly, the personal competence, judgment andethics of accountants ensure that the accounting information can berelied upon as affair representation of the firm's financialcondition. We can apply our accounting course to our business andto our personal financial strategy. What are the one or two mostimportant ideas that emerged from this discussion?

Information from accounting records is important for makingbusiness decisions. What are some examples of business decisionsthat require the use of accounting information?

and

The accounting equation is important to businesses as well asindividuals. What are the various parts of the accounting equation?Explain how the accounting equation can be used to analyze thefinancial position of a business or an individual.

Due to recent beef recalls, Southwest Steakhouse is consideringincorporating. Bob, the owner, wants to protect his personal assetsin the event the restaurant is sued.

1.First answer which advantage of incorporating is mostapplicable in protecting Bob's personal assets? A. A corporationhas continuous life. B. There is a mutual agency among thestockholders. C. Corporations can raise more money to pay forgovernment regulations. D. The transfer of corporate ownership iseasy. E. Stockholders have limited liability.

2.What are other advantages of organizing as a corporate entity?(Select three that apply.) A. A corporation has continuous life. B.Start-up costs are lower than other business forms. C. Thecorporation is taxed separately from the shareholders. D. Amajority vote is all that is required for any business decision. E.All income and expenses are split evenly among the shareholders. F.It does not allow stockholders to bind the business to a contract.G. There is no mutual agency among the stockholders and thecorporation

3.

What are some disadvantages of organizing as a​ corporation?​(Select three that​ apply.)

A.

​Start-up costs are higher than other business forms.

B.

Stockholders have limited liability.

C.

The transfer of corporate ownership is easy.

D.

Earnings of the corporation are subject to double taxation.

E.

Ownership and management are often separated.

F.

Corporations can raise more money than a proprietorship orpartnership.

G.

It has an indefinite life.

you will give an example of a hypothetical small businessstartup situation and recommend the particular business form youfeel is most appropriate based on the characteristics of thebusiness in your example and the benefits of your chosen entity,and you will justify your choice.

Insight gained from this discussion will be useful in choosing theappropriate business form for the clients from the final projectscenario as you complete Milestone One.

Sole proprietorships, partnerships, limited liability corporations,C corporations, and S corporations all have distinct potentialadvantages and disadvantages for tax purposes. However, potentialtax implications must be considered in tandem with thecharacteristics of a business and the expectations and goals of thebusiness owners to ensure the best choice is made. When working asa financial advisor, one issue that often arises is the need toassist a new business owner in identifying the correct form abusiness should take, mainly for tax purposes.

Choose one of the five taxable entities and present an exampleof a specific hypothetical startup business situation for whichyour chosen entity might be appropriate, given the businesscharacteristics of the example you provide and the potentialbenefits a particular form of entity offers. For example, if yougave the example of opening a chain of gas stations with threeother investors, you would suggest what type of entity suits thesituation and explain your reasoning. Assume that one of the ownersof your hypothetical business is a Canadian citizen who is not aU.S. resident alien.

You have a friend that is starting a m[new business and has come to you to ask what business forms are available. What entities or business forms are available for a new enterprise? Explain the advantages and disadvantages of each. Which one would you recommend and why? Be specific.

1. Salaries and wages paid to a partner's spouse or other familymembers do not qualify as business expenses and may not be claimedas a deduction in computing ordinary income.

a. True b. False

2. Partners must report their share of partnership net income ontheir individual tax returns when it is distributed to them.

a. True b. False

3. Every domestic US partnership must file an annual tax return,regardless of its gross or net income.

a. True b. False

4. A net operating loss incurred by an 1120S corporation can beused as a carryback or carryover in computing S corporationincome.

a. True b. False

5. S corporation shareholders are required to report theirdistributive share of the corporation's net income on theirindividual tax returns, regardless of the amount distributed tothem.

a. True b. False

6. A partnership deducts charitable contributions it makesduring the year against partnership ordinary income.

a. True b. False

7. Personal expenses of a partner paid directly by thepartnership are reported by the partnership as separately stateditems.

a. True b. False

8. A limited liability company and a partnership basicallyreceive the same tax treatment.

a. True b. False

9. In a general partnership, all the partners are classified as"general partners," each of whom has unlimited liability for thedebts of the partnership.

a. True b. False

10. A partner's basis in a partnership interest can never bereduced below zero.

a. True b. False

Which one of the following is not adeductible expense in computing partnership ordinary income?

a. Guaranteed payments to partners

b. Salaries and wages paid to persons who are not partners

c. Investment interest

d. Contributions to employee benefit plans

e. All of the above are deductible in computing partnership ordinaryincome

True/False Questions:

1. Partners must report their share of partnership net income on their individual tax returns in the year the income is distributed to them.

2. Every domestic partnership must file an annual tax return, regardless of its gross or net income.

3. A partner's basis in a partnership interest can never be reduced below zero.

4. A partnership deducts charitable contributions it makes during the year against partnership ordinary income.

5. The partners are liable for the tax on the partnership income, regardless of whether the income is actually distributed to them.

6. Distributions of cash or property from a partnership are generally treated as ordinary income to the partner.

7. Partners cannot be employees of a partnership.

8. A partnership does not pay tax on its profits.

9. Rental income, Section 179 expense deduction, and foreign taxes, are all examples of separately stated items.

10. Dividend income, charitable contributions, and rent expense, are all examples of separately stated

Multiple Choice Questions:

11. Which one of the following is not a deductible expense in computing partnership ordinary income?

a. Guaranteed payments to partners

b. Salaries and wages paid to persons who are not partners

c. Investment interest

d. Contributions to employee benefit plans

e. All of the above are deductible in computing partnership ordinary income

12. Which one of the following expenses is deductible in computing partnership ordinary income?

a. Interest expense on a business loan

b. Capital losses

c. Charitable contributions

d. Foreign taxes paid

e. All of the above are deductible in computing partnership ordinary income

13. Limited liability companies are:

a. another name for limited liability partnerships.

b. legal partnerships for purposes of state and federal income taxes.

c. popular because they provide the tax benefits of a corporation with the liability protection of a partnership.

d. flow-through entities for federal tax purposes.

e. none of the above.

14. Which of the following types of businesses would not be considered as a flow-through entity?

a. LLP

b. LLC

c. S corporations

d. C corporations

e. All of the above are considered flow-through entities.

15. Which one of the following income or expense items is included in the calculation of partnership ordinary income?

a. Dividend income

b. Rental income from real estate

c. Charitable contributions

d. Cost of goods sold

e. None of the above

16. Which of the following is not a separately stated item?

a. Rental income

b. Guaranteed payments

c. Interest expense

d. Interest income

e. All of the above are separately stated items

17. Which of the following is true regarding how partners treat guaranteed payments they receive from a partnership?

a. Guaranteed payments received for services rendered by the partner are subject to social security, Medicare, and income tax withholding by the partnership.

b. Guaranteed payments received for services rendered by the partner are not subject to social security or Medicare tax withholding, but are subject to income tax withholding by the partnership.

c. Guaranteed payments received for services rendered are subject to self-employment tax.

d. Guaranteed payments received for services rendered are reported by the partners that receive them on Schedule C.

e. Guaranteed payments received for services rendered are subject to social security and Medical tax withholding, but are not subject to income tax withholding by the partnership.

18. Where on the tax return does the partnership show the beginning and end of the year balances in the assets, liabilities, and capital accounts?

a. Schedule K

b. Schedule K-1

c. Schedule M-1

d. Schedule M-2

e. Schedule L

19. A reconciliation of a partnership's financial net income and the income (loss) reported on the Analysis of Net Income (loss) reported on page 1 of the partnership's tax return is shown on:

a. Schedule K

b. Schedule K-1

c. Schedule M-1

d. Schedule M-2

e. Schedule L

20. Which of the following increases a partner's basis in a partnership interest?

a. Cash distributions received from the partnership

b. A decrease in the liabilities of the partnership

c. The partner's allocable share of tax-exempt interest

d. The partner's allocable share of Section 179 expense

e. None of the above increases a partner's basis in the partnership interest

Which one of the following expensesis deductible in computing partnership ordinary income?

a. Interest expense on a business loan

b. Capital losses

c. Charitable contributions

d. Foreign taxes paid

e. All of the above are deductible in computing partnership ordinaryincome

11. Which one of the following is not a deductible expense incomputing partnership ordinary income?

a. Guaranteed payments to partners

b. Salaries and wages other than to partners

c. Investment interest

d. Contributions to employee benefit plans

e. All of the above are deductible in computing partnershipordinary income

12. Which one of the following expenses is deductible incomputing partnership ordinary income?

a. Interest expense on a business loan

b. Capital losses

c. Charitable contributions

d. Foreign taxes paid

e. All of the above are deductible in computing partnershipordinary income

13. Which of the following types of businesses would not beconsidered as a flow-through entity?

a. LLP

b. LLC

c. S corporations

d. C corporations

e. None of the above

14. Which one of the following income or expense items isincluded in the calculation of partnership ordinary income?

a. Dividend income

b. Rental income from real estate

c. Charitable contributions

d. Cost of goods sold

e. None of the above

15. If a corporation wants to make an S election for the currentyear, by what date must the election be made?

a. Within the first 30 days of the current tax year

b. Within the first 60 days of the current tax year

c. By the end of the current tax year

d. Within the first 2 1/2 months of the current tax year

e. By the first day of the current tax year

16. The normal filing date for a calendar-year S corporation is____________.

17. Every partnership doing business within the U.S. files theinformational return Form ____________.

18. Single taxpayers who actively participates in a partnershipreport his/her share of partnership profits or losses frompartnership income on Schedule____ and Form _______ on theirindividual income tax return.

Earl Jackson, the owner of a computer sales business, hascontacted your firm to help him determine which type of entitywould be most advantageous as he merges with another company togrow his business. Supporting documents are provided in theResources tab for your analysis. Your coworker, a staff accountantat your firm, Beach & Seas CPAs, has prepared a letterexplaining the advantages and disadvantages of each type of entity.Juan Orlando, the managing partner, has asked you to review theletter and the supporting documents to make any necessarycorrections before he signs and sends it to the client.

To revise the document, click on each segment of blue, bold,underlined text below and select the needed correction, if any,from the list provided. If the underlined text is already correctin the context of the document, select [Original text] from thelist

context of the document, select [Original text] from thelist.

January 10, 20X1

Earl Jackson
48684 Clermont Avenue
Flipperville, FL 33999

Dear Earl:

Based on our meeting last month, it is our understanding thatyou are planning to combine your business with AA Computer Service,Inc. (AACS), owned by Kathleen Hamilton, and are seeking an entitywith more flexibility than your current sole proprietorship.The new business, E&K ComputerLand (E&K), will bean accrual basis, calendar-year entity.(*A) Both you andKathleen will continue to be calendar-year taxpayers. Three of theoptions available to the new combined computer sales and servicebusiness are a regular C corporation (C Corp), an S corporation (SCorp) and a general partnership (Pship). However, to be aPship, AACS must liquidate, as it cannot be a partner of E&K;only individuals can be owners in a Pship.(*B)

When determining which entity form to choose for your newbusiness, there are several factors to be considered. An importantfactor is the taxation of the business. S Corps areseparate taxable entities, so double taxation can occur when theentity has taxable income and distributions are made.(*C)Pships and S Corps are tax reporting entities, meaning theentity level income flows through to the owners and is taxed onlyonce on the owners’ personal returns.(*D) With CCorps and S Corps, income and losses are allocated according to thecapital interest accounts.(*E) This provides moreflexibility than with Pships, which requires an allocation based oncapital interest accounts.(*F)

The possible loss due to a lawsuit or upon liquidation should beconsidered when selecting the entity form.S Corps and Pships have the least protection because ownersinclude all liabilities in their basis; whereas a C Corp has theability to limit liability since owners are liable only to theextent of their investment.(*G) When you decide to expandthe ownership of E&K, limited liability may be of greatimportance to new investors. Speaking of investors, in C Corps andPships, there can be multiple classes of ownership.However, in S Corps there can only be one class ofownership, and at least one of the owners must be a CCorp.(*H)

I hope this information helps you with your decision as to whichentity form is best for E&K ComputerLand. Let us know whatdecision you make, and we will be happy to help you with theaccounting and tax aspects of combining your business with AACS tocreate E&K.

Sincerely,
Juan Orlando, CPA
Managing Partner

Answer Options to choose from for each *marked sentence:

(*A)

[Original text] The new business, E&K ComputerLand(E&K), will be an accrual basis, calendar-year entity.

- [Delete text]

- The new business, E&K ComputerLand (E&K), will be anaccrual basis, fiscal-year entity.

- The new business, E&K ComputerLand (E&K), will be acash basis, calendar-year entity.

- The new business, E&K ComputerLand (E&K), will be acash basis, fiscal-year entity.

- The new business, E&K ComputerLand (E&K), will be ahybrid basis, calendar-year entity.

- The new business, E&K ComputerLand (E&K), will be ahybrid basis, fiscal-year entity.

(*B)

[Original text] However, to be a Pship, AACS mustliquidate, as it cannot be a partner of E&K; only individualscan be owners in a Pship.

- [Delete text]

- However, to be a C Corp, AACS must liquidate as it cannot be ashareholder of E&K; only individuals can be owners in a small CCorp.

- However, to be a C Corp, you must incorporate your businessbecause AACS, which is a C Corp, cannot combine with a soleproprietorship.

- However, to be an S Corp, AACS must liquidate, as it cannot bean owner of E&K; C Corps cannot be owners in an S Corp.

- However, to be an S Corp, you must incorporate your businessbecause AACS, which is a C Corp, cannot combine with a soleproprietorship.

(*C)

[Original text] S Corps are separate taxable entities,so double taxation can occur when the entity has taxable income anddistributions are made.

- [Delete text]

- C Corps are separate taxable entities, so double taxation canoccur when the entity has taxable income and distributions aremade.

- Pships are separate taxable entities, so double taxation canoccur when the entity has taxable income and distributions aremade.

- C Corps and S Corps are separate taxable entities, so doubletaxation can occur when the entity has taxable income anddistributions are made.

- S Corps and Pships are separate taxable entities, so doubletaxation can occur when the entity has taxable income anddistributions are made.

- C Corps and Pships are separate taxable entities, so doubletaxation can occur when the entity has taxable income anddistributions are made.

(*D)

[Original text] Pships and S Corps are tax reportingentities, meaning the entity level income flows through to theowners and is taxed only once on the owners’ personal returns.

- [Delete text]

- C Corps are tax reporting entities, meaning the entity levelincome flows through to the owners and is taxed only once on theowners’ personal returns.

- S Corps are tax reporting entities, meaning the entity levelincome flows through to the owners and is taxed only once on theowners’ personal returns.

- Pships are tax reporting entities, meaning the entity levelincome flows through to the owners and is taxed only once on theowners’ personal returns.

-C Corps and S Corps are tax reporting entities, meaning theentity level income flows through to the owners and is taxed onlyonce on the owners’ personal returns.

- C Corps and Pships are tax reporting entities, meaning theentity level income flows through to the owners and is taxed onlyonce on the owners’ personal returns.

(*E)

[Original text] With C Corps and S Corps, income andlosses are allocated according to the capital interestaccounts.

- [Delete text]

- With S Corps and Pships, income and losses are allocated on aper-share, per-day ownership basis.

- With C Corps and Pships, income and losses are allocated basedon the initial investments in the entity.

- With S Corps, income and losses are allocated based on thebalances in the ownership accounts.

- With Pships, income and losses are allocated based on theownership agreement, and special allocations are permitted.

- With C Corps, income and losses are allocated by the board ofdirectors.

(*F)

[Original text] This provides more flexibility thanwith Pships, which requires an allocation based on capital interestaccounts.

- [Delete text]

- This provides more flexibility than with C Corps, whichrequires an allocation based on the board of director’sdeclarations.

- This provides more flexibility than with S Corps, whichrequires an allocation based on per-share, per-day ownership.

- This provides more flexibility than with Pships, whichrequires an allocation based on the ownership accounts.

- This provides more flexibility than with S Corps, whichrequires an allocation based on the ownership agreement.

- This provides more flexibility than with C Corps, whichrequires an allocation based on initial investments in theentity.

(*G)

[Original text] S Corps and Pships have the leastprotection because owners include all liabilities in their basis;whereas a C Corp has the ability to limit liability since ownersare liable only to the extent of their investment.

- [Delete text]

- C Corps have the least protection because upon liquidation,owners must contribute to the entity to the extent of any losses;whereas S Corps and Pships are only liable to the extent ofrecourse debt.

- General Pships have the least protection because there isunlimited liability for the owners; whereas C Corps and S Corpshave the ability to limit liability since the owners are liableonly to the extent of their investments.

- S Corps have the least protection because upon liquidation,owners are liable to the extent of recourse debt; whereas C Corpshave the most protection due to the owners being liable only to theextent of their investment.

- S Corps and Pships have the least protection because ownersinclude all liabilities in their basis; whereas C Corps owners areonly liable to the extent of their investment plus short-term debts(accounts payables).

- C Corps and S Corps have the least protection because to theextent of recourse debt, the owners are liable; whereas Pshipsowners increase their protection by including all liabilities intheir basis.

(*H)

[Original text] However, in S Corps there can only beone class of ownership, and at least one of the owners must be a CCorp.

- [Delete text]

- However, in S Corps there can only be one class of ownership,and the owners must be within the same family or limited extendedgroup.

- However, in S Corps there can only be one class of ownership,and this class must all have the same voting rights

- However, in S Corps there can only be one class of ownership,and revenue cannot be of a passive nature.

- However, in S Corps there can only be one class of ownership,and not more than 75 owners of which none are C Corps.

- However, in S Corps there can only be one class of ownership,and not more than 100 owners of which none are nonresidentaliens.

ADDITIONAL DOCUMENTATION ON NEXT PAGE

ENTITY AGREEMENT DRAFT Incomplete

(Not for legal use; planning purposes only)

THIS AGREEMENT (the "Agreement") made and entered into this__________day of __________,in the year __________(the "ExecutionDate"), among

·Earl Jackson of 48684 Clermont Ave, Flipperville, FL33999,owner of Jackson Computer Sales

AND

·AA Computer Services, Inc. of 2400 Ocean Drive, Flipperville,FL33999, whose sole shareholder is Kathleen Hamilton of 6203 FrontStreet, Flipperville, FL 33999

Thereby set forth their desire to combine Jackson Computer Salesand AA Computer Services, Inc. to create a new entity of E&KComputerLand to be located at 2400 Ocean Drive, Flipperville,FL33999.The ownership percentages will be based on the net fairvalue of the assets contributed to E&K ComputerLand.

Legal Entity

The parties agree that the combination of Jackson Computer Salesand AA Computer Services, Inc. will result in E&K ComputerLand,carrying on business in the form of a __________legal entity withall the rights, privileges and obligations prescribed by the statelaw of Florida. All documents, licenses, and registrationsnecessary to create the legal entity will be filed with the Stateof Florida.

Tax Entity

In accordance with the law of the Internal Revenue Code(IRC),E&K ComputerLand will elect to be taxed asa(n)__________entity and file a Form__________tax return.

Accounting Method:

As required by the IRC, the entity will use the accrual methodfor determining its gross profit from sales of inventory and thecash method for all other aspects of the business, where possible.Valuing inventory will use the lower of cost or market andfirst-in, first-out methods.

Tax Year:

The ending date of the tax year will be determined based on thetax law requirements. If

there are options, March 31 is preferred, followed by June 30and October 31. A calendar year is the least desired.

Notes for Completing Draft

Income:

If the entity created is –

·C Corporation: Earl and Kathleen will receive salaries. Any netincome in excess of reasonable business needs being retained willbe paid as dividends based on common share ownership.

·S Corporation: Earl and Kathleen will receive salaries. Allincome and expenses will be allocated based on tax law with onlycommon stock issued to owners.

·Partnership: Earl and Kathleen will receive guaranteedpayments. All income and expenses will be allocated based on thisagreement. Profit and loss allocations to be based on ownership

percentages with rights to adjust as partners deem necessary. Inaddition, all of the depreciation on the building located at 2400Ocean Drive, Flipperville, FL 33999, will be allocated to Kathleen,and income from initial inventory will be allocated to Earl.

EMAIL From: Kathleen Hamilton [[email protected]]

Sent:Thursday, January 5, 20X1 7:50 PM

To:Juan Orlando

Subject: Re: Combination of Businesses

Hello Juan,

Here is the information you requested about AA Computer Services(AACS).

·Set up as a regular corporation within Florida.

·Files an 1120 tax return with a March 31 year-end with about$300,000 of gross

income.

·Uses cash basis of accounting primarily because it is a servicebusiness.

·For the few sales of products, accrual basis is used.

·AACS has a $300,000 mortgage on its building. Earl will move inhis business here and our new company will be at this location. Noother liabilities.

I’m not expecting to have to liquidate to combine with Earl’sbusiness. Please let me know if this is not the case.

As requested by the lawyers, I had AACS appraised by Jefferson& Sons. The appraisal came in at $700,000. The formal write-upwith all the details was sent directly to the lawyers, and I hadanother copy sent to you.

As for tax information for me, I just have a salary from AACS,which is basically whatever net income AACS has for the year afterall other expenses. I have some investment income and that isit.

Let me know if you need anything else.

Kathy

EMAIL From: Earl Jackson[[email protected]]

Sent: Friday,January 6, 20X1 4:31 PM

To:Juan Orlando

Subject:Re: Combination of Businesses

Dear Juan,

I just got the appraisal from Jefferson & Sons and theyvalued my business at $500,000. Of course, this does not take intoconsideration that I owe $200,000 on my business loan. They saidthat Kathy Hamilton told them to send a copy of her appraisal andmine to Beach & Sea and Davis, Garcia & Brown, so youshould receive a copy of both at the same time.

You asked about my taxes for Jackson Computer Sales. Most of the$400,000 gross revenue comes from sales of computers, monitors,peripherals, and accessories. I also sell tablets. All of itsincome and expenses have been reported on my personal return on mySchedule C. I pay self-employment taxes on the net amount, whichhas been about $100,000.

If there is anything else you need, just let me know.

Have a great weekend,

Earl

1. Which entity choice(s) protect the owners from the generalobligations of the business?

A. Sole proprietorship

B. C Corp

C. S Corp

D. Parnership

E. LLC

F. LLP

2.Which entity choice(s)only tax the profits of the business onetime?

A. Sole proprietorship

B. C Corp

C. S Corp

D. Parnership

E. LLC

F. LLP

3. While entity choice(s) are available for businesses with asingle owner?

A. Sole proprietorship

B. C Corp

C. S Corp

D. Parnership

E. LLC

F. LLP

4. Which entity choice(s) are required to file an annual incometax return?

A. Sole proprietorship

B. C Corp

C. S Corp

D. Parnership

E. LLC

F. LLP

5. Dicussion Question: Government provided goods and servicescan be categorized as public goods or nonpublic goods. Provideexamples of each. For which goods and services is it appropriate toconsider a user fee to raise revenues associated with the costsincurred in providing those goods and services? When theopportunity exists to cover the costs of those goods and serviesthrough user fees, why do govenments often choose to raise taxesfor those goods and services partly through other means?

32. A limited liability company combines the legal aspectsof:

a. a sole proprietorship and a partnership

b. a partnership and a corporation

c. a corporation and a cooperative

d. a sole proprietorship and a corporation

What are the advantages and disadvantages of choosing acorporate form of business entity over a sole proprietorship? Whatare the advantages of an LLC versus a LLP?

What are the advantages and disadvantages of these businessorganizations

A) Sole proprietorship

B) Partnership

C) Corportion

D) Limited- Liability Company (LLC)

What entities or business forms are available for a new​enterprise? Explain the advantages and disadvantages of each.

Begin by selecting the entity or business forms available for anew enterprise.​ (Select all that​ apply.)

A.Partnerships

B. Limited liability companies​(LLC)

C.Sole proprietorships

D.Limited liability partnerships​(LLP)

E.Corporations

What are the advantages and disadvantages of these businessorganizations

A) Sole proprietorship

B) Partnership

C) Corportion

D) Limited- Liability Company (LLC)

* What are three characteristics of a sole proprietorship?

* Are these characteristics the same as or different from those of a partnership?

* What are three characteristics of a limited liability company that differ from those of a partnership?

* Compare a C corporation to an S corporation.

C corporations are not pass through entities like S corporationsor LLC's. C corporations are subject to the double taxation concepton corporate earnings. This is where corporate earnings are taxedat both the entity level and a second time when the earnings aredistributed to shareholders in the form of dividends. Let's discussthis double taxation for a moment and put some numbers to it. Let'ssay that a C corporation has $1,000,000 in taxable income. Underthe new tax law it will pay a tax at the rate of 21% or $210,000.Let's then say that the C corporation then distributes theremaining $790,000 to its shareholders in the form of dividends.The shareholders will pay a second tax at the rate of 20% or$158,000. Thus, the IRS has received $368,000 in tax on the$1,000,000 of income or a combined tax rate of 36.8%. If thecorporation was an LLC or was eligible and made an S corporationelection, the tax rate would be 20% or $200,000. The tax savings is$168,000 by making the S election or being an LLC. S corporationsare pass through entities. So are partnerships, limited liabilitycompanies, limited partnerships, and limited liabilitypartnerships. It is usually, but not always, advantageous for astartup business to be a pass through entity. While the income froma pass through entity is taxed to its owners, any losses from thebusiness also pass through. Losses are very common in the earlyyears of a startup. The owners want to deduct these losses againstany other income they may have. In my experience, this ability todeduct the losses is just as important as avoiding double taxation.In sum, it is not so much about the income as it is about thelosses. What do you think?

1. Can shareholders of a C corporations deduct its lossesagainst corporation's E&P passed to its shareholders asdividends (i.e. income of shareholders)?

2. When can a C (regular) corporation's corporate veil bepierced resulting in its shareholders being personally liable forcorporation’s actions?

3. How is the income of the following business entitiestaxed?

•Sole proprietorship

•C (regular) corporation

•Partnership

•Limited liability corporation (LLC)

•S corporation

4. Kent and Craig, who want to start a horse-training business,spoke to an insurance agent about getting insurance to coverpotential liabilities, but were told that they could not getliability insurance because of the high risk nature their proposedbusiness. What business entities would you recommend to Kent andCraig? Why?

Please answer all the questions above.

Kent and Craig, who want to start a horse-training business, spoke to an insurance agent about getting insurance to cover potential liabilities, but were told that they could not get liability insurance because of the high risk nature their proposed business. What business entities would you recommend to Kent and Craig? Why?

Dave and Cindy, who want to start a law firm, each have $1,000 to invest in the business and no personal assets and want limited liability protection and only 1 level of taxation.They want your advice on whether they should form their law firm as: 1) a general partnership; or 2) a limited liability company (LLC). What business entity would you recommend? Why?

ANSWER IN 8 SENTENCES

2. A question that asks  to come up with a contemporary news event that is an example of the concept in question.  (i) describe the event and (ii) to explain why the event is an example of the concept in question.  (ii) the explanation why the news events is an a relevant example. This question is

What is a contemporary news event that is an example or illustrates the socialist conception of equality?

I need help with this I don’t understand I

Need an answer