Barry Potter and Winnie Weasley are considering making an S election on March 1, 2019, for their C corporation, Omniocular. However, first they want to consider the implications of the following information:

• Winnie is a U.S. citizen and resident.
• Barry is a citizen of the United Kingdom, but a resident of the United States.
• Barry and Winnie each own 50 percent of the voting power in Omniocular. However, Barry’s stock provides him with a claim on 60 percent of the Omniocular assets in liquidation.
• Omniocular was formed under Arizona state law, but it plans on eventually conducting some business in Mexico.

a. Is Omniocular eligible to elect S corporation status?

For the remainder of the problem, assume Omniocular made a valid S election effective January 1, 2019. Barry and Winnie each own 50 percent of the voting power and have equal claim on Omniocular’s assets in liquidation. In addition, consider the following information:

• Omniocular reports on a calendar tax year.
• Omniocular’s earnings and profits as of December 31, 2018, were $55,000.
• Omniocular’s 2018 taxable income was $15,000.
• Omniocular’s assets at the end of 2018 are as follows:

*$110,000 under FIFO accounting.

• On March 31, 2019, Omniocular sold the land for $42,000.
• In 2019, Omniocular sold all the inventory it had on hand at the beginning of the year. This was the only inventory it sold during the year.

• Assume that if Omniocular were a C corporation for 2019, its taxable income would have been $88,500.

2. How much LIFO recapture tax (in total) is Omniocular required to pay and when is the first installment due?
3. How much built-in gains tax, if any, is Omniocular required to pay?
4. How much excess net passive income tax, if any, is Omniocular required to pay?
5. Assume Barry's basis in his Omniocular stock was $40,000 on January 1, 2019. What is his stock basis on December 31, 2019?

For the following questions, assume that after electing S corporation status Barry and Winnie had a change of heart and filed an election to terminate Omniocular’s S election, effective August 1, 2020.

• In 2020, Omniocular reported the following income/expense items:

6. For tax purposes, how would you recommend Barry and Winnie allocate income between the short S corporation year and the short C corporation year if they would like to minimize double taxation of Omniocular’s income?
7. Assume in part (f) that Omniocular allocates income between the short S and C corporation years in a way that minimizes the double taxation of its income. If Barry’s stock basis in his Omniocular stock on January 1, 2020, is $50,000, what is his stock basis on December 31, 2020?
8. When is the earliest tax year in which Omniocular can be taxed as an S corporation again?

Question:

How much LIFO recapture tax (in total) is Omniocular required to pay and when is the first installment due? As per new tax rule, the corporate tax rate is 21% .

Due Date

Total LIFO recapture tax -----------------?             April 15,2019

--------------------------------------------------------------------------------------------------------------------------------------

e. Assume Barry's basis in his Omniocular stock was $40,000 on January 1, 2019. What is his stock basis on December 31, 2019? (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.)
g. Assume in part (f) that Omniocular allocates income between the short S and C corporation years in a way that minimizes the double taxation of its income. If Barry’s stock basis in his Omniocular stock on January 1, 2020, is $50,000, what is his stock basis on December 31, 2020? (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.)

e.Stock basis   -------------------------?

g. Stock basis ------------------------?

(a) The 2018 New Zealand Conceptual Framework states that “an asset is a present economic resource controlled by the entity as a result of past events.”

Discuss this statement in relation to inventory items that are in transit between the buyer and seller.

(b) Raymond Traders is a small business, and it undertakes periodical stock-takes to determine its inventory value. On 30 June 2020, Raymond Traders completed a physical stock-take, and inventory on hand as at 30 June 2020 had a cost of $39,600. However, some of the inventory items were deemed to be obsolete and Net Realisable value was determined to be $36,000.

(i)   Based on the information above, what inventory management system is Raymond Traders currently using? Outline one advantage and one disadvantage of the inventory management system.

(ii)   Advice Raymond Traders on the value of inventories to be shown in the Statement of Financial Position as at 30 June 2020, with reference to NZ IAS 2. Explain.

(iii)   In light of your answer (ii) above, prepare a journal entry to record any required adjustments on 30 June 2020.

(c)   NZ IAS 2, paragraph 36 requires companies to make disclosures to present inventory fairly in their financial statements. List six disclosures that companies must include in the financial statements as additional disclosures.

On January 1, 2020, Pharoah Co. enters into a contract to sell a customer a wiring base and shelving unit that sits on the base in exchange for $3,100. The contract requires delivery of the base first but states that payment for the base will not be made until the shelving unit is delivered. Pharoah identifies two performance obligations and allocates $1,085 of the transaction price to the wiring base and the remainder to the shelving unit. The cost of the wiring base is $650; the shelves have a cost of $330.

Prepare the journal entry on January 1, 2020, for Pharoah. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)

Prepare the journal entry on February 5, 2020, for Pharoah when the wiring base is delivered to the customer. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)

Prepare the journal entry on February 25, 2020, for Pharoah when the shelving unit is delivered to the customer and Pharoah receives full payment. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)

Suppose you are the brand manager for the JWU Online MBA Program. Design a promotional strategy to grow the program with high potential students. Define your target market. Describe your advertising objectives, messages, and media choices. How might you use communication to build the brand.

Trinidad is saturated with business schools; however, you want to launch a new and private business school in the same market. Traditionally, the existing business schools have not always considered marketing and branding their schools because they are of the firm belief that their institutions are already known and nothing else needs to be done to attract new students.
Essentially, the existing business schools are not distinguishing themselves from each other. There is competition where a lot of new business schools are coming to the market, a lot of MBA degrees are being offered by minor business schools, the market is less and less clear, and there appears to be a brand proliferation and business schools proliferation. Additionally, in conducting your competitor research, you found that many of the existing schools have weak brands and there is a clear danger of bringing down the value of the MBA degree itself. Your continued research has found that the majority of the existing business schools have been plagued by low enrollment over the past five years. The reasons for this predicament range from prospective students not being interested in furthering their studies to financial challenges and poor quality programmes. Moreover, the pricing structure for the majority of the current business schools is extremely high, given the present economic challenges facing the country. As a consequence of these harsh realities, having an MBA degree will not be the important thing; rather the importance now lies in the school you got your MBA from.  
Notwithstanding these challenges, you are determined to launch your new business school by the next academic year (September 2017). Your chief intention is to make a difference with your new business school. In constructing your mini marketing plan for this scenario, you can create a name for your business school and choose your own location in Trinidad to set up your learning institution.

Construct your mini marketing plan around the following elements:
Market-oriented Mission Statement                                                                             

Marketing Goals                                                                                                           

Target Market                                                                                                               

Product                                                                                                                         

Competition                                                                                                                  

Threats & Opportunities Analysis                                                                                 

Marketing Strategies/Promotions                                                                                 

Pricing, Positioning & Branding                                                                                    

Controls/Evaluation                                                                                                      

Here are some real statistics for various countries in 2003: per capita income vs. per capita recorded music sales:

Country                      Per Cap. Income Per Cap. Music

                                   ($ thousands)             Sales ($)

Norway                      42.4                     55.9

United Kingdom          30.9                     53.35

United States              42.0                     40.43

Australia                     32.9                     33.84

Switzerland                 35.3                     34.40

Finland                       30.6                     26.98

Canada                      32.9                     20.79

United Arab Emirates        29.1                     11.33

Greece                            22.8                     8.10

Israel                               22.3                     6.68

Czech Republic                 18.1                     3.96

South Africa                     12.1                     3.75

South Korea                      20.4                     3.34

Mexico 10.1                     3.30

Egypt                                4.4                   0.15

Indonesia                          3.7                   0.33

4a) Which variable should be considered the dependent (y) variable, and which the independent (x) variable?

4b) According to this model, if a country’s income improves by ^$3,000, how much to you expect music sales to increase by?

4c) What is the correlation coefficient? Is it statistically significant? How strong is this model?

4d) Why do you think the correlation is as high as it is?

4e) If a region of country has a per-capita income of ^$25,000, predict its per-capita music sales.

4f) Looking at the U.S, Canada. & Europe only, delete the United Arab Emirates, South Africa, South Korea Mexico, Egypt, and Indonesia from the model. Answer 3b, 3c, and 3e again.

4g) Why might it have been OK to throw away the countries we did in part f?

It is August 2020. You are calculating the monthly paycheck, including employee withholding, and employer payroll related expenses for Bonnie Bigwig. Her pay through July is $110,000. Her August gross pay $20,000. Her Federal income tax withholding is at the 25% rate, her state withholding is at the 5% rate. (Ignore local income tax.) Her health insurance (all paid by the company) is $1,500 / month. She contributes $1,000 / month to the United Way.

Give the journal entry to pay Bonnie. Also, give the journal entry to record the employer payroll related expenses.

It is August 2020. You are calculating the monthly paycheck, including employee withholding, and employer payroll related expenses for Bonnie Bigwig. Her pay through July is $110,000. Her August gross pay $20,000. Her Federal income tax withholding is at the 25% rate, her state withholding is at the 5% rate. (Ignore local income tax.) Her health insurance (all paid by the company) is $1,500 / month. She contributes $1,000 / month to the United Way. Give the journal entry to pay Bonnie. Also, give the journal entry to record the employer payroll related expenses.

Assume that Timberline Corporation has 2019 taxable income of $270,000 for purposes of computing the §179 expense. It acquired the following assets in 2019: (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.)

Required:

1. a-1. What is the maximum amount of §179 expense Timberline may deduct for 2019?

2. a-2. What is Timberline’s §179 carryforward to 2020, if any?

5. A machine was acquired on January 1, 2018, at a cost of $80,000. The machine was originally estimated to have a residual value of $5,000 and an estimated life of 5 years. The machine is expected to produce a total of 100,000 components during its life, as follows: 15,000 in 2018, 20,000 in 2019, 20,000 in 2020, 30,000 in 2021, and 15,000 in 2022.

Instructions

(a)   Calculate the amount of depreciation to be charged each year, using each of the following methods :

       1.    Straight-line method

       2.    Units-of-production

       3.    Double diminishing-balance

(b)        Which method results in the highest depreciation expense during the first two years? Over all five years?