Case 4

When Disney opened its $4.4 billion Euro Disneyland outside Paris, concerns over the park’s impact on French culture were expressed. To begin with, the French dedicate Sundays only to family outings. In addition, they are unaccustomed to snacking and eat promptly at 12:30, which creates bottlenecks at parks and restaurants. Disney learned that French employees objected to providing the friendly greetings and smiles expected of all amusement park workers. They then hired multilingual employees from all over Europe because Disney’s goal was to attract people from all countries of Europe. A complaint of European investors was that rigid U.S. management style did not take into account the values and customs of the people it intended to attract. For example, Europeans often bring their own lunches and do not spend money at the park’s gourmet restaurants and hotels. The park initially lost money after it opened in 1992. Discuss the course of action Disney could take to accommodate the values and customs of the people it hopes to attract.

2 pages

Gale, McLean, and Lux are partners of Burgers and Brew Company with capital balances as follows: Gale, $88,000; McLean, $77,000; and Lux, $151,000. The partners share profit and losses in a 3:2:5 ratio. McLean decides to withdraw from the partnership. Prepare General Journal entries to record the May 1, 2020, withdrawal of McLean from the partnership under each of the following unrelated assumptions:

a. McLean sells his interest to Freedman for $172,000 after Gale and Lux approve the entry of Freedman as a partner (where McLean receives the cash personally from Freedman).

b. McLean gives his interest to a son-in-law, Park. Gale and Lux accept Park as a partner.
c. McLean is paid $77,000 in partnership cash for his equity.

d. McLean is paid $136,000 in partnership cash for his equity.

e. McLean is paid $31,250 in partnership cash plus machinery that is recorded on the partnership books at $119,000 less accumulated depreciation of $87,000. (Round final answers to 2 decimal places.)

4. Emily likes bird watching. Every year she takes a vacation to a park famous for

its rare birds. She goes there for 10 days. From her past experience, she knows that on

average she can get 6 good sightings a day. A very good day for her is a day with at least

10 good sightings. Assume Poisson distribution of the number of good sightings on any day

(independently of other days).

a) What is the probability that she can get at least one very good day this time?

b) What is the expected number of very good days during this vacation?

c) What is the expected number of days she has to go bird watching in this park before

getting one very good day?

d) Extra credit: What should the average number of good sightings per day be so that

the probability that she gets at least one very good day during this vacation be at least 0.9?

Suppose that you are responsible for making arrangements for a medical convention and you have been charged with finding a city for the convention that has the least expensive hotel rooms. You have narrowed your choices to Atlanta and Houston. The data set contains a sample of hotel room prices from Atlanta and Houston. Based on the sample data, can you conclude that the mean price of a hotel room in Atlanta is lower than one in Houston? Perform a two-sample t-test with a significance level of α = 0.05. Use Excel to show your work.

1. Create a box plot of the data.

2. State the null and alternative hypotheses. Is this a left-tailed, right-tailed or two-tailed test?

3. Compute the following. Assume unequal variance and df = 66. The t.test() function can be used to compute the p-value directly.

Do you reject or fail to reject the null hypothesis? Whats the conclusion?

Suppose that you are responsible for making arrangements for a medical convention and you have been charged with finding a city for the convention that has the least expensive hotel rooms. You have narrowed your choices to Atlanta and Houston. The data set contains a sample of hotel room prices from Atlanta and Houston. Based on the sample data, can you conclude that the mean price of a hotel room in Atlanta is lower than one in Houston? Perform a two-sample t-test with a significance level of α = 0.05. Use Excel to show your work.

1. Create a box plot of the data.

2. State the null and alternative hypotheses. Is this a left-tailed, right-tailed or two-tailed test?

3. Compute the following. Assume unequal variance and df = 66. The t.test() function can be used to compute the p-value directly.

Do you reject or fail to reject the null hypothesis? Whats the conclusion?

Your professor is going on vacation. He has narrowed down a list of potential hotels, but he is still overwhelmed by the data. He loves great food and wants to do all the activities at the resort.

1. Develop two unique ways to display the data (two unique types of charts) to show him where he should stay.

2. Recommend the best way to present the data. Write a narrative summary of what hotel you recommend based on the data visualization and the tradeoffs that you observe.

Arts Centre Parking

The following information is required for Questions 5–8:

It is said that "Australia has one of the world's great opera houses; unfortunately, the outside is in Sydney and the inside is in Melbourne."

The opera house in Melbourne is called the Arts Centre, and it has 250 seats. Demand for a typical opera is Q = 400 – 2P, but there is only demand so long as the opera patrons can park for free beneath the Arts Centre. (Opera patrons are lazy, and don't like to walk. They are also selfish, so each patron drives in a car all by himself or herself.)

There are 300 parking places beneath the Arts Centre, and the parking is owned and operated by the Arts Centre. Suppose there are no other uses for the parking places.

What price do you charge for the opera tickets? Answer is $100

For Questions 6–8 assume that the Arts Centre is very conveniently located in the middle of town, so its parking lot is very popular. They can sell as many parking places as they want for $20 per night. However, a Melbourne city ordinance prohibits them from charging more than $20 per night for parking. The system at the Arts Centre is to allow opera patrons to park for free, if they show their ticket, and to allow a certain number of "outside people" (non-opera-attenders) to park at $20 per night.

Q1) How many parking places do they set aside for "outside people", on an opera night?

Q2) Suppose that the very popular opera "Carmen" is showing tonight. Demand for that opera is Q = 600 - 2P.
How many parking places does the Arts Centre allow "outside people" to use, now?

Q3) Now what is the price of an opera ticket?

The Attached report shows the performance of Hotel XYZ for 2014 and 2015. Hotel XYZ is a luxury resort with a mix of 85% Transient and 15% Group.

After looking at this report, please answer the following questions:

• What was the Total YOY( year over year) growth? Was the growth driven by Room nights? ADR? both?
• Which segment drove this growth or decline? Transient or group?
• Which sub-segment within Transient and Group drove the growth or decline? Please explain both.
• Hotel XYZ overall strategy for next year is to grow rate without significantly increasing room nights. Based on the performance of 2015 and 2014, how will you shift your segmentation in order to achieve this?

Religious Rowan worked for many years for a hotel restaurant as a waitstaff person. The restaurant had a family-style menu and was closed on Sundays. The restaurant was owned and operated by the hotel and primarily served a family oriented clientele. The restaurant was acquired by a national chain that changed the dynamic of the restaurant, making it into a bar and pub that was open 7 days per week.

Religious Rowan is a devout conservative churchgoer and does not believe in working on Sundays, because that is a time for church, nor does Rowan believe in the consumption of alcohol. Rowan told the new employers that due to religious beliefs, working any Sunday shifts and/or taking orders and serving alcohol to clients would be impossible.

The employer agreed that Rowan could always have Sundays off but insisted that Rowan get certified by the state to be able to sell alcohol as that was a new requirement of the waitstaff position. Rowan refused, and because there were always several other waitstaff personnel available that could take and serve alcohol orders, the restaurant said that was fine, because Rowan was otherwise an excellent employee.

Rowan was able to serve for 3.5 years in the same role with the accommodations of not working on Sundays or being involved in selling or serving alcohol without a problem. However, a new restaurant manager came in and determined that in order for the restaurant to improve its efficiency of operations, which was a goal the new manager was hired to implement, Rowan could still skip Sunday shifts but could no longer be accommodated by not participating in the sale of alcohol to customers as that pulled other waitstaff off of their assigned tables and was not perfectly efficient. Rowan refused to get licensed to sell alcohol or to serve it and was subsequently fired for insubordination. Rowan then sued for the failure of the hotel to accommodate her religious beliefs. How should the court rule and why?

Suppose you are a CPA hired to represent a client that is currently under examination by the IRS. The client is the president and 95% shareholder of a building supply sales and warehousing business. He also owns 50% of the stock of a construction company. The client’s son owns the remaining 50% of the stock of the construction company. The client has received a Notice of Proposed Adjustments (NPA) on three (3) significant issues related to the building supply business for the years under examination. The issues identified in the NPA are unreasonable compensation, stock redemptions, and a rental loss. Additional facts regarding the issues are reflected below: Unreasonable compensation: The taxpayer receives a salary of $10 million composed of a $5 million base salary plus 5% of gross receipts not to exceed $5 million. The total gross receipts of the building supply business are $300 million. The NPA by the IRS disallows the salary based on 5% of gross receipts as a constructive dividend. Stock redemptions: During the audit period, the construction company redeemed 50% of the outstanding stock owned by the client and 50% of the stock owned by the client’s son, leaving each with the same ownership percentage of 50%. The IRS treated the redemption as a distribution under Section 301 of the IRC. Rental loss: The rental loss results from a building leased to the construction company owned by the client and his son. Use the Internet and Strayer databases to research the rules and income tax laws regarding unreasonable compensation, stock redemptions treated as dividends and related party losses. Be sure to use the six (6) step tax research process in Chapter 1 and demonstrated in Appendix A of your textbook as a guide for your written response. Write a three to four (3-4) page paper in which you: Based on your research and the facts stated in the scenario, prepare a recommendation for the client in which you advise either acceptance of the proposed adjustments or further appeal of the issue based on the potential for prevailing on appeal. Create a tax plan for the future redemption of the client’s stock owned in the construction company that will not be taxed according to Section 301 of the IRC. Propose a strategy for the client to receive similar amounts in compensation in the future and avoid the taxation as a constructive dividend. Your assignment must follow these formatting requirements: Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions. Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length. The specific course learning outcomes associated with this assignment are: Analyze tax issues regarding corporate formations, capital structures, income tax, non-liquidating distributions, or other corporate levies. Prepare client, internal, and administrative documents that appropriately convey the results of tax research and planning. Create an approach to tax research that results in credible and current resources. Use technology and information resources to research issues in organizational tax research and planning. Write clearly and concisely about organizational tax research and planning using proper writing mechanics.