28. If a company uses the periodic inventory system, what is the impact on net income of including goods in transit f.o.b. shipping point in purchases, but not ending inventory? a. Overstate net income.
Comprehensive Problem 83 (Ch. 15) a. Identify significant tax and nontax issues or concerns that may differ across entity types. CCS will encounter several tax and nontax issues related to different entity types (LLC, Partnership, Corporation, or Sole Proprietorship). Nontax issues include Responsibility for Liabilities, and Rights, Responsibilities, and Legal Arrangement among Owners.
1. From a tax perspective, and disregarding other issues such as limited liability, does it always make sense to operate businesses in a separate business entity? When might it be better to be a sole proprietor? The issue here is if it always makes sense to operate businesses in a separate business entity and when might it be better to be a sole proprietor. According to Smith, Harmelink & Hasselback.
Cui xin yuan Case 11 -1 Polluter Corp Objectives: the appropriate classification in the statement of cash flows for the company’s purchase and sale of Emission allowances Accounting pronouncement: ASC 230 -10 statement of cash flow ASC 350 -30 -25 -3 General Intangibles Other than Goodwill Question 1: What is the appropriate classification in the statement of cash flows for the company’s purchase of Emission Allowances? The recognition of intangibles is defined under ASC 350 -30 -25 -3[Costs of internally developing, maintaining, or restoring intangible assets that are not specifically identifiable, that have indeterminate lives, or that are inherent in a continuing business or nonprofit activity and related to an entity as a whole, shall be recognized as an expense when incurred According to case, Upon receipt of the EAs, the Company recorded the EAs as intangible assets with a cost basis of zero, in accordance with The Federal Energy Regulatory Commission (“FERC”) accounting guidance for EAs. And To meet its need for additional EAs in fiscal years 2010–2014, on April 2, 2010, the Company spent $3 million to purchase EAs with a vintage year of 2012 from Clean Air Corp Acquiring of emission allowances means that Polluter Corp. had to buy allowances from another company. The emission allowances re regarded as tangible assets with zero cost basis. because the Emission and the cost of emission allowances have indetermination lives and inherent in a continuing business , the emission allowance is recognized as expense when incurred.
Evidence of intangibles may exist in the form of contracts or licenses. Intangibles may arise from Government grants, such as patents, copyrights, and trademarks,acquisition of another business, and private monopolistic arrangements arising from contractual agreements, such as franchises and leases. Microsoft's patents, McDonald's franchises, and Apple's trade name iPod are some popular intangibles. Companies record intangible assets at cost. Intangibles are categorized as having either a limited life or an indefinite life.
The law of apparent agency refers to a commercial law that deals with contracts. This law involves a person called an agent. The agent is typically authorized to act on the behalf of the other. This will then help aid the relationship with a third party. This apparent agency can differ from other agency principles depending on who the legal representation is for, for example someone could have the representation form a guardian.
http://www.irs.gov/businesses/small/article/0,,id=146330,00.html.” Dividends, interest, annuities, and royalties not accumulated through the ordinary course of trade or business is Portfolio income, not passive income. The sales of stock and bonds are also portfolio income. 7-13) Martially participation is
Material participation is a concept used by the law to determine what qualifies as a passive activity. A passive activity is defined as any business or trade activity that the taxpayer does not materially participate in running. Therefore, material participation as a concept helped with the difficulty in dealing with such a subjective issue. It is important to distinguish passive income from active income, since losses are treated differently under each classification on the taxpayer’s tax return. Problems:
– Globalisation (Assignment 1) HSY 3701/1 ASSIGNMENT: 1 unique code: 862610 11 March 2013 According to Knox et al (2003: 71 – 83) we can distinguish six basic features of the world economy as: -‐ Firstly the world economy consists of a single world market, in which production is for exchange rather than use. -‐ Secondly, the world economy has always had a territorial division between political states. This division
In determining which goods to import from which country and which goods to export, I encountered some of the advantages and some limitations of the international trade. According to the theory of comparative advantage, a country should specialize in the production and export of commodities that it can produce at a lower opportunity cost than other countries while it should import commodities that are produced at a lower opportunity cost than other countries. Limitations such as imposing a quota or tariff can raise the price of products and lead to a loss in consumer surplus or cause retaliation from the country therefore reducing the goods a country is able to export. There are factors that influence the foreign exchange rate which also has an impact on a country’s importing and exporting. Regardless of these things, international trade is important to a countries