Jones purchase the stock of Smithon outright leaving Smithon intact? The stock should not be purchase by Mr. Jones. Mr. Jones acquiring the assets, liabilities and also would inherit the contractual obligations of the selling corporation, would, be the results of the purchase. In lay terms, he has bought the existing Smithon Corporation and he is responsible of ensuring daily operations run efficiently but the tax aspect of acquisition he is responsible for existing and any future tax liabilities that the selling corporation had. It would be my advice for Mr. Jones to not buy the stock because of the liability of current and future tax obligations which Mr. Jones would incur from the purchase of the stock.
Explain. [Bannister v. Bemis Co. , 556 F.3d 882 (8th Cir.2009)] Case brief: Bemis Co, breached the covenant not to compete, the breach was material. Bannister could not accept employment with a Bemis competitor, but Bemis was to pay Bannister his salary. There was no term for a partial release. Bemis “released” Bannister to seek employment with one exception—Mondi Packaging.
ii) Compliance with U.S. GAAP for Tesco: Tesco was also incorrect in their dealing of the refund from a customer’s perspective. Article 605-50-25-10 on “Customer's Accounting for Certain Consideration Received from a Vendor” states that “a rebate or refund of a specified amount of cash consideration… shall be recognized as a reduction of the cost of sales based on a systematic and rational allocation of the cash consideration offered to each of the underlying transactions” (FASB ASC). This means that Tesco should not have recorded the £750 million as sales
An entity changes its depreciation method for production equipment from straight-line to a units-of-production method based on hours of utilization. The auditor concurs with the change, although it has a material effect on the comparability of the entity’s financial statements. 6. An entity discloses certain lease obligations in the notes to the financial statements. The auditor believes that the failure to capitalize these leases is a departure from generally accepted accounting principles.
April 8, 2012 Tax File Memorandum From:., CPA. M.A.F.M Subject: Mr. Jones Taxpayer Engagement On today April 5th, 2012 I met with Mr. Jones regarding our Previous Meeting on April 2nd, 2012 to discuss some questions and possible outcomes about potential future financial investment decisions, and the tax ramifications of these decision and possible outcomes. Facts: Mr. Jones is considering the purchase of a manufacturing company Smithton Widgets which is very profitable. Mr. Jones is a majority shareholder in another C-Corp. Known in this case as Johnson Services which has accumulated significant losses.
They create the fictitious purchases of equipment which form a potential inherent risk for the company. Moreover, it would cause an overstatement of equipment; Finally, I found another inherent risk is inflated assets or overstate inventory. Hebding instructed Medlin to artificially reduce operating expenses and increase inventory. They want to inflate inventory, in order to they can make adjustments to costs and inventory in the financial statements without documentation or support. It cause overstate inventory and understate the cost.
But the amount that a manager can hold stocks should be limited because the ownership would be split in this way as it is not good for Brazos itself to decrease its ownership. The real estate subsidiary is a good idea that Brazos could purchase it as an asset and they can still control the operation and employees. Since Brazos can not only buy tangible assets but also intangibles asset which is Goodwill $34.7 million. Brazos
Voodoo Anyone? Christopher Warden breaks down economics into a fool proof explanation, and uses terms references which a dummy could understand. As I read this informative book I gathered an understanding for the way in which our economy works, as well as the unseen ways in which our government handles the issues that affect our everyday life. In the first chapter, the author discusses what prices are the difference between the price of things, and the cost of things. He breaks down what the stores charge us in order to sell the product at a price we will pay, so the store can still make a profit on the item.
Nonetheless, Dell has a few reservations about illogical and impractical approaches proposed by the board. The company believes that stock options award should be regarded as compensation; however this understanding should not be exposed as an expense to the company, once this type of compensation is related to an equity distribution rather than using the company’s assets. Concerning the fair value, Dell does not agree with the presented methods of how to measure the fair value. For example, the lattice model would interfere with the understanding of the subject by the user of financial statements. Another disagreement between FASB proposal and Dell believes is related to the method of accounting for income taxes.
(2009) ‘Beyond Corporate Social Responsibility: oil Multinationals and social challenges’ p3 Cambridge: Cambridge University Press You are required to evaluate the quote above. Why should there be such disagreement about what CSR is? Why does this matter and what effects does this have in business and society? In this ever-changing world of economics and business operations the definitions of business services and the strategies are ever changing as well. These days the way managers operate and strategize their business policies has taken a stance against the previous operational strategy that a business exists only to make profit without any consideration or regards to anything else in the world as said by the economist Milton Friedman in his essay “deriding the idea that a business had any responsibility other than to maximise its profits within legally and ethically acceptable margins, arguing that ‘a corporate executive is an employee of the owners of the business.