Quintiles Transnational: Dennis Gillings founded Quntiles Transnational in 1982 when he realized that drug companies were great at inventing new medicines but not particularly good at analyzing the vast amounts of data that came out of clinical trials. He thought drug testing should be broken down into a series of standardized steps and he signed up a network of doctors interesting in enrolling patients in clinical trials. In the ten years leading up to 2010, Quintiles had conducted 4,700 trials on 2.7 million patients.

Quintiles also established a large contract sales organization (CSO) to support its pharmaceutical company clients. Large pharmaceutical companies, faced with cost pressures as well as the costs of maintaining their own sales forces, have increasingly turned to CSOs like the Innovex division of Quintiles, PDI Inc., or inVentive Health to provide variable cost “flex reps” as an alternative to adding the fixed cost they would incur if they added to their own sales forces. CSOs are widely used in therapeutic areas that require somewhat less scientific knowledge, like respiratory, dermatology, and lifestyle. The growth rate in contract sales and marketing was projected at 35% to 2015.

Question: Assume you are the CEO of a pharmaceutical company. Do you think you might use the CSO capabilities of Quintiles? Why or why not? 200 words or more

Which of the following statements is false?

In 2019, Tariq Hass created a trust for the benefit of his 2 children, and named the eldest child as the trustee. The trust instrument provided that the income earned from the trust should be distributed annually and an additional $1,000 should be distributed to each beneficiary. What classification best describes this trust?

A charitable
B complex
C grantor
D simple

Andy and Currie met in Tax class and were married. They have five children: Miranda age 6, Savannah age 10, Wenbo age 12, Rachel age 15, and Luke age 20. Luke has his own apartment but he works in the family business, he earned $25,000 last year. Andy works for a CPA firm. In 2020 he earned $77,000, $12,000 of federal income tax was withheld, and $3,000 of state income tax was withheld. In addition, they earned $300 of interest on their joint savings account, they received dividends of $1,200 on stock that they own (all the dividends are qualified), and they sold 100 shares of stock for $20 a share (they paid $10 a share three years ago).

Currie operates a welding shop in a facility that she rents. The business motto is “Still not as fun as Tax Class”. She operates as a sole proprietor, she has one part-time employee, plus Luke who does most of the welding (the rest of the children have to clean up the shop each evening before they get their supper).

Income and expenses of the welding business in 2020 were:

            Gross revenues                         $248,000

            Employee salaries                         54,000

            Employee payroll taxes                   5,400

            Building Insurance                         16,000

            Welding supplies                           55,000

            Rent                                             18,900

Currie paid estimated State income tax of $4,300 during the year, and estimated federal income tax of $15,000.

In addition the family also had the following expenses:

Family medical and dental expenses    $19,000

Real estate taxes                                   3,400

Home mortgage interest                       9,000 (their mortgage is $300,000)

Credit card finance charges                    2,600

Sales tax                                               4,200

Cash donations to their church              4,000

Assume that there is no Alternative Minimum Tax (AMT) for them.

What is their taxable income? taxes before tax credits? total tax liability? refund?

Requirements:

1. Journalize and Post the adjusting entries using the T-accounts

2. Prepare an adjusted trial balance as of December 31, 2018

November 3: Purchased Canoes for $4,800 on account.

December 2: Purchased Canoes signing a notes payable for $7,200.

At December 31, the business gathers the following information for the adjusting entries:

a. Office supplies on hand, $165

b. Rent of one month has been used (1000.00).

c. Determine the depreciation on the building using straight-line depreciation. Assume the useful life of the building is five years and the residual value is $5,000.

d. $400 of unearned revenue has now been earned.

e. The employee who has been working the rental booth has earned $1,250 in wages that will be paid January 15, 2013.

f. Canyon Canoes has earned $1,850 of canoe rental revenue that has not been recorded or received.

g. Determine the depreciation on the canoes purchased on November 3 using straight-line depreciation. Assume the useful life of the canoes is 4 years and the residual value is $0.

h. Determine the depreciation on the canoes purchased on December 2 using straight-line depreciation. Assume the useful life of the canoes is 4 years and the residual value is $0.

i.   Interest expense accrued on the notes payable, $50.

Unadjusted Trial Balance

Question 1: Austin v. New Hampshire (P&I Clause) New Hampshire, which levies no personal income taxes, adopted an income tax that effectively applied only to nonresidents. The Commuters Income Tax was imposed on the income of nonresidents earned in New Hampshire. The state also levied a tax on residents income earned outside the state, but immediately nullified its effect through another provision that exempted such income from tax. Does the New Hampshire Commuters Income Tax violate the Privileges and Immunities Clause? Why or why not?

Question 2: Michelin Tire Corp v. Wages (I&E Clause) Michelin stored tires and tubes imported from France and Nova Scotia in a warehouse in Georgia while they were awaiting distribution to franchised dealers throughout the Southeast. The county assessed ad valorem property taxes against the tires and tubes, and the taxpayer challenged the assessment under the Import-Export Clause. What was the ruling of the Court and why?

Smith Family

• Single male
• Paid $900 in alimony last year
• No kids
• Earned $37,500 last year from FT job
• Earned $3,000 from PT job
• Rents an apartment for $600/mth
• Spent $500 on moving expenses for a new job
• Paid $2,400 in federal income taxes through his paychecks
• Paid $700 in interest on a student loan
• Gave $500 to a local for profit soccer team for new uniforms
• Bought a new car with a $2,000 down payment
• Contributed $3,000 to a Roth IRA last year

1. What is the Smith family Gross Income?
2. What is the Smith Family AGI?
3. What would the standard deduction be for the Smith family?
4. What is the total of itemized deductions the Smith family can use?
5. How much of the soccer donation can the Smith family claim?
6. What is the Taxable income for the Smith family?
7. How much will the Smiths owe/get in refund for their tax return?
8. What is the average tax rate for the Smith family?

Transaction Reporting in Fund and Government-Wide Statements

Consider the following transactions of Daley County:

1. General property taxes of $4,500,000 are levied.

2. Grants of $850,000 are received from the state to finance public safety programs.

3. Investment income of $55,000 is earned and received in cash on investments of a debt service fund.

4. Investment income of $85,000 is earned and received in cash on investments made using money received from a generous citizen. The money is held in trust to finance acquisitions of the public art gallery, outlays are limited to earnings and the original contribution cannot be spent.

5. User fees of $45,000 are received from operations of the community pool.

6. Depreciation on public safety equipment is $35,000 for the year.

7. Investment income of $25,000 is earned and received in cash on general fund investments of excess cash.

8. The motor pool submits $32,000 in charges for vehicle use to other units in the government.

9. Current year accrued interest on general long-term debt is $30,000, and is not due for several years.

Required

For each transaction:

• Indicate the fund affected and prepare the journal entry required in the fund financial statements.  
• Indicate whether the transaction is considered a governmental or business-type activity in the government-wide financial statements and prepare the journal entry required in the government-wide financial statements.

Note:  If an item is not reported in a fund statement and/or in the government-wide statements, select Not applicable and No entry.  

1. General property taxes of $4,500,000 are levied.

Fund financial statements:

Which fund is the transaction recorded in?

AnswerDebt service fundEnterprise fundGeneral fundInternal service fundPermanent fundSpecial revenue fundNot applicable