Week 1

In: Other Topics

Submitted By lawgirl25
Words 994
Pages 4
Accounting Week 1 homework
• Chapter 1: Problem 1-1
a. Calculate the tax disadvantage to organize a U.S. business today as a corporation, as compared to a partnership, under the following conditions. Assume that all earnings will be paid out in cash dividends. Operating income (operating profit before taxes) will be $500,000 per year under either organizational form. The tax rate on corporate profits is 35% (Tc = 0.35), the average personal tax rate for the partners is also 35% (Tc=0.35), and the capital gain tax rate on dividend income is 15% (T div=0.15).
b. Now recalculate the tax disadvantage using the same income, but with the maximum tax rates that existed before 2003. (These rates were 35% (Tc=0.30) on corporate profits and 38.6% (Tp=0.386) on personal investment income)


Answer to A
If the firm is organized as a partnership, operating income will be taxed only once, so investors will receive $500,000 x (1- 0.35) =$325,000. If the firm is organized as a corporation, operating income will be taxed once at the corporate level, leaving $500,000 x (1- 0.35) = $325,000 available for disputation to investors, and then the dividends paid out will be taxed at the investors capital gain rate. This yields net disposable income of $325,000 x (1- 0.15) = $276,250. Partners thus pay a total tax rate of 35 percent on business income, while corporate shareholders pay a combined tax rate of 44.75 percent.
[1-(1-0.35)(1-0.15)] on this income, the “corporate tax wedge” in thus the difference between these two rates, or 9.75 percentage points. (44.75% -35%)


Answer to B
Before 2003. If the firm organized as a partnership, operating income will be taxed only once, so investors will receive $500,000 x (1- 0.386) = $307,000. If the firm is organized as a corporation, operating income will be taxed once at the corporate level and again at the personal level, so…...

Similar Documents

Week 1

...The importance of making this business a success is increasing profitability, reducing the waiting time in the restaurant, and having a process implemented that will maintain a balance between the demand for service and the capacity of the system to provide the service to customers. Customers are dissatisfied with the wait time and it necessary to evaluate the customer population, customer que wait times, the servicing system, and develop a priority rule for determining who is served next. The current business flow through process at the pizzeria is: 1. four servers 2. two kitchen staff 3. four manual ovens 4. 14 tables that seat four with no other table seating types available 5. Cream puffs product in addition to Pizza and uniqueness. As the business is being passed down, it is important for the successor to recognize the learning curve and understand the restaurant as it functions today. During peak times, the pizzeria staffs four wait staff and two kitchen workers. With customers arriving in groups of two to four every three to five minutes there are only 14 4-top tables, but no 2-top tables to seat each party. The entire process from when a customer walks into the pizzeria to the time they leave takes 53 minutes. Eleven of the minutes are consumed just waiting to be seated at an open table and another 13 minutes are consumed back in the kitchen processing the order – room for improvement. Applying the learning curve theorem By turning four of the 4-tops...

Words: 797 - Pages: 4

Week 1

...Week One Discussion Questions • What is strategic management? What are the roles of mission and vision statements in strategic management? Can an organization have a successful strategic plan without effective mission and vision statements? Why or why not? • What is the difference between mission and vision statements? What factors must be considered to produce an appropriate mission and vision statement for an organization? • What is strategic planning? What is the purpose of strategic planning? Why is it necessary? What are the components of a strategic plan? Which component is the most important? Why? Week Two Discussion Questions • What is a SWOTT analysis? What is its purpose in strategic planning? Must you conduct a SWOTT analysis to have an effective strategic plan? Why or why not? • What are the primary internal organizational considerations for the development of a strategic plan? Which consideration is the most important? Why? • What are the primary external organizational considerations for the development of a strategic plan? Which consideration is the most important? Why? • What are the key planning factors for competitive success? Provide an example of an organization that has achieved competitive success through planning. Provide an example of an organization that has failed to achieve competitive success as the result of failed planning. Week Three Discussion Questions • What are the different types of strategies? What are the...

Words: 555 - Pages: 3

Week 1

...2-7 - The PCAOB (Public Company Accounting Oversight Board) was created by the Sarbanes-Oxley Act to oversee auditors of public companies to establish auditing standards. For privately held companies the ASB (auditing standards board) provide auditing standards. Prior to PCAOB, ASB also provided guidelines for public companies. 2-10 The GAAS were not supposed to be a step-by-step set of instructions in how to conduct an audit but rather they are meant to represent a framework for the audit to be conducted within. 2-16 A-1 B-3 C-3 D-4 2-20 A - It could be argued that under GAAS "General Qualifications and Conduct" that the CPA Firm does not meet the "Adequate training and proficiency" criteria since they have never had a client go public before. B - Since public companies are covered by PCAOB and private audits under ASB they may not be familiar with all rules and regulations. 3-23 A-2 B-3 C-3 3-25 A-2 B-3 C-2 3-26 A- It should clearly state that it is an opinion and not be represented as absolute facts. The second phrase is definitive in character. B - The country of origin is not mentioned in second phrase. Accounting laws differ between countries so the accounting base guidelines are implied when country is listed. C - The second paragraph doesn't state that it is an opinion based on the audit. D - The CPA firm has the legal responsibility and should be listed, not the individual auditor. E - The first statement includes the......

Words: 277 - Pages: 2

Week 1

...Week One – DQ 1, What is the definition of marketing? What are the benefits and drawbacks of incorporating marketing into the sales function of an organization? Do you think that marketing should be included as part of the sales organization within a company? Explain why or why not.  Marketing is the foundation, direction, and/or functions an entity uses to produce a product, service, or idea and makes certain that the product, service, or idea they produce reaches consumers. There are a couple benefits and drawbacks to incorporating marketing into the sales function of an organization. The benefits of incorporating marketing into the sales function of an organization is the marketing function can decrease operating expense defining the consumer’s needs and wants which will decrease the cost. The drawbacks of incorporating marketing into the sales function of an organization deals with micro marketing and macro marketing. Being socially responsible and ethical to both, consumers and non consumers, may increase sales costs, due to production costs, and decrease sales profits (Perreault, Cannon, McCarthy, 2011). I do feel that marketing should be included as part of the sales organization within the company because services that the company provides in a marketing sales aspect can apply the analysis so that the consumers needs and wants can be analyzed. Perreault, W. D. Jr., Cannon, J. P., & McCarthy, E. J. (2011).Basic marketing: A marketing strategy planning...

Words: 584 - Pages: 3

Week 1

...Accounting Week 1 homework • Chapter 1: Problem 1-1 a. Calculate the tax disadvantage to organize a U.S. business today as a corporation, as compared to a partnership, under the following conditions. Assume that all earnings will be paid out in cash dividends. Operating income (operating profit before taxes) will be $500,000 per year under either organizational form. The tax rate on corporate profits is 35% (Tc = 0.35), the average personal tax rate for the partners is also 35% (Tc=0.35), and the capital gain tax rate on dividend income is 15% (T div=0.15). b. Now recalculate the tax disadvantage using the same income, but with the maximum tax rates that existed before 2003. (These rates were 35% (Tc=0.30) on corporate profits and 38.6% (Tp=0.386) on personal investment income) Answer to A If the firm is organized as a partnership, operating income will be taxed only once, so investors will receive $500,000 x (1- 0.35) =$325,000. If the firm is organized as a corporation, operating income will be taxed once at the corporate level, leaving $500,000 x (1- 0.35) = $325,000 available for disputation to investors, and then the dividends paid out will be taxed at the investors capital gain rate. This yields net disposable income of $325,000 x (1- 0.15) = $276,250. Partners thus pay a total tax rate of 35 percent on business income, while corporate shareholders pay a combined tax rate of 44.75 percent. [1-(1-0.35)(1-0.15)] on this income, the “corporate tax wedge” in...

Words: 994 - Pages: 4

Week 1

...MAT-23n0 Discrete Mathematics Week 1 Homework Problems Chapters 1 & 2 Section 1.1, pages 12–16: #2, #11, #31 #2: Which of these are propositions? What are the truth values of those that are propositions? a) Do not pass go. b) What time is it? c) There are no black flies in Maine. d) 4 + x = 5. e) The moon is made of green cheese. f) 2n ≥ 100. C , E & F are propositions and only f is true because 2n≥100 is a true statement. #11: Let p and q be the propositions p: It is below freezing. q: It is snowing Write these propositions using p and q and logical connectives (including negations). a) It is below freezing and snowing. b) It is below freezing but not snowing. c) It is not below freezing and it is not snowing. d) It is either snowing or below freezing (or both). e) If it is below freezing, it is also snowing. f) Either it is below freezing or it is snowing, but it is not snowing if it is below freezing. g) That it is below freezing is necessary and sufficient for it to be snowing. A. p ^ q B. p ⊕ q C. p → q D. p ∨ q E. p → q F. p ∨ q ⊕ p ∧ q G. p ∧ q #31: Construct a truth table for each of these compound propositions. a) p ˄ ¬p b) p ˅ ¬p c) (p ˅ ¬q) → q d) (p ˅ q) → (p ˄ q) e) (p → q) ↔ (¬q → ¬p) f) (p → q) → (q → p) A. t...

Words: 1168 - Pages: 5

Week 1

...Week 1 Individual Assignment MKT Week 1 Individual Assignment The Meaning of Marketing The Merriam Webster Dictionary defines marketing as the process or technique of promoting, selling, and distributing a product or service (Merriam Webster, 2013). Merriam Webster further defines marketing as an aggregate of functions involved in moving goods from producer to consumer (Merriam Webster, 2013). Business Dictionary defines marketing as the management process through which goods and services move from concept to the customer. It includes the coordination of four elements called the 4 P's of marketing: Product, Price, Placement, and Promotional Strategy (Business Dictionary, 2013). I believe that marketing is as it has been described by both Merriam Webster and Business Dictionary. The purpose of marketing is to get a product or service from the producer of the product or service to the consumer who will use the product or service. I believe that the four P’s are fundamental in getting the product or service from the producer to the consumer. Marketing is extremely important to the success of any organization. Why Marketing is Important to an Organizations Success There are many reasons that marketing is important to the success of any organization. First marketing gets the word out about an organizations products or services (Lorette, 2013). Getting the word out informs consumers about your product. It is important that consumers know about your product or service...

Words: 628 - Pages: 3

Week 1

...* Information system you will be implementing My project will be implementing a computer lab in child and youth services. I have experience working for child and youth services, I have enough experience and educational background to understand what is needed to implement this type of information system. Company and company background information Child and youth services consists of three organizations divided by age group. The first is Child Development Center, the second is School Age Services, and the last is Youth Center. All three centers provide an preschool and after school program/environment for help with homework, health and fitness and clubs. * Goals and objectives the company for implementing your chosen information system If these three organizations would implement an information system, in this case a computer lab, it would benefit each youth as well as staff. By having a computer lab, youths would have access to the internet to complete their homework, get help for their homework as well as learn about how to be safe online. This opens more opportunities for staff to teach youths about computer systems, how to type, improve their typing skills, and what a network consists of, etc. * The computer lab equipment will be purchased. Each new computer lab will have 15 computers, 1 printer. This new computer lab network will be integrated with the existing center network. * What tools/software will you be using to create your website –......

Words: 255 - Pages: 2

Week 1

... coaching effectiveness by identifying potential risk within a team. The new web tool will allow sales representatives to complete more work by setting a detailed plan of how many customers each employee will have to help each day to meet the company’s sales goal. Access to a web-based system will allow the sales representatives to complete more work while meeting with the customer by reducing travel time. Also by allowing sales representatives to meet with more prospective clients on a daily basis and provide better customer service, resulting in customer growth and an increase in company sales. The structure in the changes of this new process is not an easy task. By using a Phased process, the company can still maintain and increase productivity with this new streamlined process. The implementation of the Phase Process crucial but also a distinguishing characteristic of successful project management identifying the project deliverables. The Phased process will focus on allowing lessons learned in earlier stages to be incorporated in systems installed, establishing a solid foundation of available project-level data prior to rolling-up enterprise-level information and Helps to overcome resistance to change. The Phased process consists of 4 main phase: 1. Initiation Phase • Initial communication to management and assistance in the identification of pilot projects. • Project management methodology and software training for identified pilot team members. 2. Project...

Words: 561 - Pages: 3

Week 1

... examples to show the information. |Who was the sender? I was | | |Who was the receiver? A customer at a casino | | |What was the message? The ribeyes placement is going to go up this next week. | | |What channel was used to send the message?text message | | |What was the misunderstanding that occurred? I did not check the auto correct it should have stated the price was going to go up. | | |How could the misunderstanding have been avoided? Proofreading the message before sending to a customer. | | Bring your completed chart to class for sharing in small groups. After each group member has shared his or her example with other group members, answer the following questions: 1. What did you learn about the communication process from this activity? I need to pay more attention to what I am doing. I need to take more time to accurately communicate my message. 2. What seemed to be the main causes of the misunderstandings? The wrong word being used in the sentence sent to the customer. 3. What tips can you suggest for preventing misunderstandings in......

Words: 412 - Pages: 2

Week 1

.... Imagine there is no documentation of any historic event or person. It would be impossible to learn from past mistakes. We would know nothing of those who came before us and all of their struggles and successes. We need to study history so we may make informed decisions on very important current events and issues, just look at what we have learned in this past week. France underestimated Vietnam, and so did America, you would think they we would have learned from another countries mistake before going to war for 15 years. If you think what would have happened if America was never discovered by Columbus? I find that statement odd in itself, how can someone discover something where people already live? But imagine if they didn’t come to the new world, there was no American revolution. What would this place look like today? This is why history is important; one belief is that you are the past. If you think of yourself, if someone says explain who you are, you can’t make up things that didn’t happen yet. The main resource for me and probably many others is the internet. The world is literally at your fingertips. Granted there are many websites out there that can have false information but it is best to use reputable web pages. We all know that Wikipedia isn’t one of those webpages since anyone can edit the information. Many times we are tempted to use this page for our information since it is the go to site for nearly everything, but it is best to stay away. Another...

Words: 737 - Pages: 3

Week 1

...MGMT340 Final Exam Study Guide YOU MAY WANT TO PRINT THIS GUIDE. 1. The final exam is "open book, open notes." The maximum time you can spend in the exam is 3 hours, 30 minutes. If you have not clicked the Submit For Grade button by then, you will be automatically exited from the exam. In the final exam environment, the Windows clipboard is disabled, and so you will not be able to copy exam questions or answers to or from other applications. 2. You should click the Save Answers button in the exam frequently. This helps prevent connection timeouts that might occur with certain Internet Service Providers, and also minimizes lost answers in the event of connection problems. If your internet connection does break, when you reconnect you will normally be able to get back into your final exam without any trouble. Remember, though, that the exam timer continues to run while students are disconnected, so students should try to re-login as quickly as possible. The Help Desk cannot grant any student additional time on the exam. 3. See Syllabus "Due Dates for Assignments & Exams" for due date information. 4. Reminders: * You will only be able to enter your online Final Exam one time * Click the "Save Answers" button often * If you lose your Internet connection during your Final Exam, logon again and try to access your Final Exam. If you are unable to enter the Final Exam, contact first the help desk and then your instructor. * You will always be able to...

Words: 1340 - Pages: 6

Week 1

...MGMT- 404 PROJECT MANAGEMENT STATEMENT OF PARTICIPation This document will contain the information needed for your team operations, guidelines and commitment. It should be kept in doc sharing and each update should have a version control identifier (e.g., Team A SOP v1, v2, v3, etc.). IMPORTANT NOTE: The statement of participation must be posted in the team’s doc sharing area and the final submission must be available for the team to review and approve each week. Approval can be achieved by downloading the document. If you have disagreements, it is critical to contact your project leader and get a correction posted immediately. The professor should be notified of any disagreements. If the statement of participation is not submitted, the entire team will receive the same grade (including any point loss from other team members). I. Team Information PROJECT NAME: | MEMBER NAME | # | PHONE # | | EMAIL | | MEETING AVAILABILITY | Jade Xiong | 1 | | | | | Monday at 5 / email/ phone | Raquel Godoy | 2 | | | | | Monday at 5/ email/ phone | Genaro Zavala | 3 | | | | | Monday at 5/ email /phone | | 4 | | | | | | | 5 | | | | | | | 6 | | | | | | II. Weekly meeting schedule The most successful teams schedule at least (2) meetings a week throughout the course. Scheduling standing meetings allows everyone to schedule this time in advance and coordinate other activities around the scheduled meeting times. Meetings can...

Words: 1698 - Pages: 7

Week 1

...Executive Summary: Patton Fuller community hospital uses the clinical system, which is an integrated suite of healthcare applications that support various patient care like registration and scheduling; clinical orders, chart entries and reviews for physicians, nurses, emergency department personnel, and other care providers; systems for lab technicians, pharmacists, and radiologists; billing systems and insurers; and outpatient systems for the hospital’s outpatient clinics.System is built on a two-tier, client-server architecture, where the client is responsible for the presentation logic and application logic, and the server responsible for the data access logic and data storage. It allows multiple users across the network to share the server’s resources. Since the Hospital has to follow HIPPA compliance and regulation law, Patton-Fuller Community Hospital will need to make sure encryption rules are applied to their system and data is protected. Below is the symmetric and asymmetric encryption method to be used. 1) Public Key 2) Private Key 3) IPsec Public Key (Asymmetric): This encryption method will give pair of keys Message is encrypted using the public key and can only be decrypted by private key. Example RSA, Advanced Encryption Standard (AES) * RSA – It is a public key encryption method * It is a standard encryption method especially used for transmitting data over internet. * It is cost effective solution with hardware based encryption......

Words: 295 - Pages: 2

Week 1

... between optimism and psychopathology. Using the data in Table 2, formulate an opinion regarding the overall correlation between optimism and psychopathology. Provide a rationale for your answer. ■ EXERCISE 36 Questions to be Graded 1. The researchers found a significant difference between the two groups (control and treatment) for change in mobility of the women with osteoarthritis (OA) over 12 weeks with the results of F(1, 22) = 9.619, p = 0.005. Discuss each aspect of these results. 2. State the null hypothesis for the Baird and Sands (2004) study that focuses on the effect of the GI with PMR treatment on patients’ mobility level. Should the null hypothesis be rejected for the difference between the two groups in change in mobility scores over 12 weeks? Provide a rationale for your answer. 3. The researchers stated that the participants in the intervention group reported a reduction in mobility diffi culty at week 12. Was this result statistically signifi cant, and if so at what probability? 4. If the researchers had set the level of signifi cance or α = 0.01, would the results of p = 0.001 still be statistically signifi cant? Provide a rationale for your answer. 5. If F(3, 60) = 4.13, p = 0.04, and α = 0.01, is the result statistically signifi cant? Provide a rationale for your answer. Would the null hypothesis be accepted or rejected? 6. Can ANOVA be used to test proposed relationships or predicted correlations between variables in a single group? Provide a......

Words: 2119 - Pages: 9