Scenario #3 A group of 2017 graduates from the WMU College of Health & Human Services decided to stay in the Kalamazoo area and begin their career. They decided that they wanted to help the frail elderly remain in their homes by providing health care services right in the home. This seemed to be a good idea because they surveyed the competition and the other agencies providing this service had long waiting lists and could not find enough health care professionals to meet the need. This group of graduates included one occupational therapist, a social worker, two nurses, and a physician assistant. One of the graduates knew a friend from Grand Valley State University who was graduating as a physical therapist and would be interested in joining them in practice. The physician assistant needed to work under the supervision of a physician; and for billing purposes the business model they were creating would need to be under the supervision of a physician. They therefore thought that the geriatrician working at a local hospital may agree to join their practice on a part-time basis. The services they decided to provide in the home included a broad range of care including skilled nursing care, physical therapy, occupational therapy, home health aide services, medical social services, and medication monitoring as well as medical services for the home bound. 1. What type of business structure would you recommend for this group of students? WHY? 2. What type of tax structure? (Profit or Nonprofit) WHY?

Three different companies each purchased trucks on January 1, Year 1, for $60,000. Each truck was expected to last four years or 250,000 miles. Salvage value was estimated to be $5,000. All three trucks were driven 79,000 miles in Year 1, 47,000 miles in Year 2, 51,000 miles in Year 3, and 74,000 miles in Year 4. Each of the three companies earned $49,000 of cash revenue during each of the four years. Company A uses straight-line depreciation, company B uses double-declining-balance depreciation, and company C uses units-of-production depreciation.

Answer each of the following questions. Ignore the effects of income taxes.

Required

1. a-1. Calculate the net income for Year 1.

2. a-2. Which company will report the highest amount of net income for Year 1?

3. b-1. Calculate the net income for Year 4.

4. b-2. Which company will report the lowest amount of net income for Year 4?

5. c-1. Calculate the book value on the December 31, Year 3, balance sheet.

6. c-2. Which company will report the highest book value on the December 31, Year 3, balance sheet?

7. d-1. Calculate the retained earnings on the December 31, Year 4, balance sheet.

8. d-2. Which company will report the highest amount of retained earnings on the December 31, Year 4, balance sheet?

   e. Which company will report the lowest amount of cash flow from operating activities on the Year 3 statement of cash flows?

Three different companies each purchased trucks on January 1, Year 1, for $72,000. Each truck was expected to last four years or 200,000 miles. Salvage value was estimated to be $7,000. All three trucks were driven 67,000 miles in Year 1, 42,000 miles in Year 2, 40,000 miles in Year 3, and 62,000 miles in Year 4. Each of the three companies earned $61,000 of cash revenue during each of the four years. Company A uses straight-line depreciation, company B uses double-declining-balance depreciation, and company C uses units-of-production depreciation. Answer each of the following questions. Ignore the effects of income taxes. Required a-1. Calculate the net income for Year 1. a-2. Which company will report the highest amount of net income for Year 1? b-1. Calculate the net income for Year 4. b-2. Which company will report the lowest amount of net income for Year 4? c-1. Calculate the book value on the December 31, Year 3, balance sheet. c-2. Which company will report the highest book value on the December 31, Year 3, balance sheet? d-1. Calculate the retained earnings on the December 31, Year 4, balance sheet. d-2. Which company will report the highest amount of retained earnings on the December 31, Year 4, balance sheet? e. Which company will report the lowest amount of cash flow from operating activities on the Year 3 statement of cash flows?

Process Co has two divisions, A and B. Division A produces three types of chemicals: products L, M and S, using a common process. Each of the products can either be sold by Division A to the external market at split-off point (after the common process is complete) or can be transferred to Division B for individual further processing into products LX, MX and SX.

In November 20X1, which is a typical month, Division A’s output was as follows:

Product             Kg

     L               1,200

     M              1,400

     S               1,800

The market selling prices per kg for the products, both at split-off point and after further processing, are as follows:

                         $                            $

     L               5.60        LX            6.70

     M              6.50        MX           7.90

     S               6.10        SX           6.80

The specific costs for each of the individual further processes are:

Variable cost of $0.50 per kg of LX

Variable cost of $0.70 per kg of MX

Variable cost of $0.80 per kg of SX

Further processing leads to a normal loss of 5% at the beginning of the process for each of the products being processed.

Required

1. Calculate and conclude whether any of the products should be further processed in Division B in order to optimise the profit for the company as a whole.

It has been suggested that Division A should transfer products L and M to Division B for further processing, in order to optimise the profit of the company as a whole. Divisions A and B are both investment centres and all transfers from Division A to Division B would be made using the actual marginal cost. As a result, if Division A were to make the transfers as suggested, their divisional profits would be much lower than if it were to sell both products externally at split-off point. Division B’s profits, however, would be much higher.

Required

       (b) Discuss the issues arising from this suggested approach to transfer pricing.

Read the following case: An individual, Sam Rice, was injured while using a survival knife manufactured by the BearArms Knife Company. Sam is a resident of the state of Iowa. He was injured in the state of Iowa, where he was using the knife to whittle a wooden cup. The BearArms Knife Company is located in the State of Delaware. It sells its knives to retail stores throughout the United States. Sam bought his knife at Paul's Discount in Iowa City. Sam’s injuries cost him – in terms of doctor’s bills and missed income from not being able to work – well over $200,000.

Sam sued BearArms Knife Company in Iowa state court for negligence. BearArms Knife Company did not, however, respond to or otherwise contest Sam’s lawsuit, and Sam was awarded $425,000 in damages by the trial court.

Based on the legal information that you learned in this chapter, write a 1-2 sentence answer for each of the following questions.

1. What type of judgment did the trial court award against BearArms Knife Company?

2. Which court(s)--state and/or federal courts--would have jurisdiction over Sam’s lawsuit against BearArms Knife Company?

3. Explain the reasoning for your answer to question “2”.

4. What state law would Rice have invoked in trying to show that the Iowa state court had personal jurisdiction over BearArms Knife Company?

Trade War on Developed Markets is a topic of current event occurring in the business domains.

Need to write a 2-3 pages about this war and how this can affect the economy of business?

Here some questions to help you think about the topic but you can write your own thinking and what you think will affect the economy of business....

us china trade war impact on global economy

Trade war? No trade war? Does it matter? Why should we care?

how this current change economics?!

What caused the US China trade war?

Why China’s Trade War Is Now Seriously Threatened?

Does War Help Economy?

How does a trade war work?

When did the Trade war start?

how this current events affect Business!
what is good side?
what is bed side?
why it is affecting the economy ?
Who is controlling this war?Do trade wars even work?

Why a trade war can’t be won?

etc.....?!

Suppose the following list of events describes all of the economic activity resulting from an increase in government spending. Suppose that at each step after the initial one, the marginal propensity to consume is 0.88 and there are no taxes.

Step 0. The government spends $4500 on meat to host a very large dinner for foreign diplomats.

Step A. The butcher takes the income earned by selling the meat, saves some, and spends the rest on a wedding cake for his daughter.

Step B. The baker who produced the wedding cake saves some of her earnings and uses the rest to purchase beautiful candlesticks as gifts for all of her friends.

Step C. The local candlestick maker saves some of his revenue for retirement and spends the rest on building materials to improve his house.

Instructions: Modify the settings in the interactive tool to represent this event. Then click "Spending Rounds" and use the table to answer the following questions. Round answers to the nearest cent, if necessary.

How much does the butcher earn for selling the meat? $ ________

How much does the candlestick maker spend on cake? $ _______

Ms. Kim is a general partner who holds a 50% interest in the Mustang Partnership. This year, Mustang earned an ordinary business income of $200,000 before accounting for any payments to partners. Mustang also received $8,000 in qualified dividend income and $3,000 of municipal bond interest income. During the year, Mustang paid Ms. Kim a $60,000 guaranteed payment for services to the partnership plus an additional cash distribution of $30,000(assume Mustang made no payments to any other partner). Ms. Kim’s ordinary income tax rate is 25% and long-term capital gain and the dividend tax rate is 15%. At the beginning of the year, Ms. Kim’s basis in her Mustang Partnershipinterestwas $270,000.

a.) Determine the tax cost of Ms. Kim’s share of Mustang partnership income for the year (ignore self-employment tax and the QBI deduction).

b.) Determine Ms. Kim’s after-tax cash flows from her investment in the Mustang partnership for the year.

c.) Determine Ms. Kim’s basis in her Mustang Partnership interest at the end of the year.

(please show work)

Ms. Kim is a general partner who holds a 50% interest in Mustang Partnership. This year, Mustang earned ordinary business income of $200,000 before accounting for any payments to partners. Mustang also received $8,000 in qualified dividend income and $3,000 of municipal bond interest income. During the year, Mustang paid Ms. Kim a $60,000 guaranteed payment for services to the partnership plus an additional cash distribution of $30,000 (assume Mustang made no payments to any other partner). Ms. Kim’s ordinary income tax rate is 25% and long-term capital gain and dividend tax rate is 15%. At the beginning of the year, Ms. Kim’s basis in her Mustang Partnership interest was $270,000.

a. Determine the tax cost of Ms. Kim’s share of Mustang partnership’s income for the year (ignore self-employment tax and the QBI deduction).

b. Determine Ms. Kim’s after-tax cash flows from her investment in Mustang partnership for the year.

c. Determine Ms. Kim’s basis in her Mustang Partnership interest at the end of the year.

Your firm may purchase certain assets from a struggling competitor. The competitor is asking $50,000,000 for the assets. Last year, the assets produced revenues of $15,000,000. Revenues earned in the next year (i.e., year 1) and in future years are estimated using the information in the table below.

Your staff expects that the following assumptions will hold over the operating period:

• The assets will be viable for another 10 years but will be worthless at the end of the 10 year period
• The assets are qualified by the IRS for depreciation using the straight-line method
• A constant tax rate of 20%

Your staff has also identified three key areas of uncertainty, which include

Develop the annual pro forma after-tax cash flow statement for each scenario.

Note: I am pretty sure the other "experts" who answered the question previously had major flaws in their math.