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When the IRS audited Winter Corporation’s current year tax return, the IRS disallowed $10,000 of travel and entertainment expenses incurred by Charles, an officer-shareholder, because of inadequate documentation. The IRS asserted that the $10,000 expenditure was a constructive dividend to Charles, who maintained that the expense was business related. Charles argued that he derived no personal benefit from the expenditure and therefore received no constructive dividend. Prepare a memorandum for your tax manager explaining whether the IRS’s assertion or Charles’s assertion is correct. Your manager has suggested that, at a minimum, you consult the following resources:

• IRC Secs. 162 and 274

• Reg. Secs. 1.274-1 and -2

1. What was the last Television show you watched? 2. Which of the four general uses & gratifications did you employ when viewing this show? You can use more than one. Information Personal identity Integration & Social Interaction Entertainment 3. Is this a common show for you to watch? Do you always watch it for the same reason? 4. If you watched it for integration and social interaction, was it effective? Were you able to watch the show and then engage with friends/family about the show? 5. Do you always watch TV for the same reason? What is your most common use and gratification when watching TV?

1. Consider the following scenario:  

Suppose you are on the information services team of a large advertising firm. Your team holds a secret meeting to talk about ways to improve productivity. The company president wants to ensure employees are not sending personal e-mails or surfing the web for entertainment at work. The Chief Information Officer (CIO) suggests that employees be informed that their e-mails and web services will be monitored. In truth, the company does not have the resources to do this and will not be doing any monitoring. What should you do in this situation?

Evaluate the scenario by applying each of the following ethical frameworks: (a) rule utilitarianism, (b) rule deontology, (c) act deontology, and (d) social contract theory.

Problem 23-2A Preparation and analysis of a flexible budget performance report LO P1, P2, A1 Phoenix Company’s 2017 master budget included the following fixed budget report. It is based on an expected production and sales volume of 18,000 units. PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2017 Sales $ 4,050,000 Cost of goods sold Direct materials $ 990,000 Direct labor 270,000 Machinery repairs (variable cost) 72,000 Depreciation—Plant equipment (straight-line) 315,000 Utilities ($54,000 is variable) 214,000 Plant management salaries 215,000 2,076,000 Gross profit 1,974,000 Selling expenses Packaging 90,000 Shipping 126,000 Sales salary (fixed annual amount) 260,000 476,000 General and administrative expenses Advertising expense 126,000 Salaries 251,000 Entertainment expense 90,000 467,000 Income from operations $ 1,031,000 Phoenix Company’s actual income statement for 2017 follows. PHOENIX COMPANY Statement of Income from Operations For Year Ended December 31, 2017 Sales (21,000 units) $ 4,788,000 Cost of goods sold Direct materials $ 1,172,000 Direct labor 323,000 Machinery repairs (variable cost) 75,000 Depreciation—Plant equipment (straight-line) 315,000 Utilities (fixed cost is $157,500) 219,750 Plant management salaries 225,000 2,329,750 Gross profit 2,458,250 Selling expenses Packaging 102,500 Shipping 139,000 Sales salary (annual) 276,000 517,500 General and administrative expenses Advertising expense 134,000 Salaries 251,000 Entertainment expense 93,500 478,500 Income from operations $ 1,462,250 Required: 1. Prepare a flexible budget performance report for 2017

Phoenix Company’s 2019 master budget included the following fixed budget report. It is based on an expected production and sales volume of 18,000 units.

Phoenix Company’s actual income statement for 2019 follows.

Required:
1. Prepare a flexible budget performance report for 2019. (Indicate the effect of each variance by selecting for favorable, unfavorable, and No variance.)

Personal Budget

At the beginning of the school year, Katherine Malloy decided to prepare a cash budget for the months of September, October, November, and December. The budget must plan for enough cash on December 31 to pay the spring semester tuition, which is the same as the fall tuition. The following information relates to the budget:

a. Prepare a cash budget for September, October, November, and December. Enter all amounts as positive values except an overall cash decrease which should be indicated with a minus sign.

b. Are the four monthly budgets that are presented prepared as static budgets or flexible budgets?

c. Malloy can see that her present plan   sufficient cash. If Malloy did not budget but went ahead with the original plan, she would be $   at the end of December, with no time left to adjust.

Part II Content of Marketing Plan As a marketer

, you will need a good marketing plan to provide direction and focus for your brand, product, or company. To deeper understand what to write in the marketing plan, one essential step is to know competitive advantage through well-informed segmenting, targeting, differentiating, and positioning decisions. Pay attention that unlike a business plan, a marketing plan has a more limited scope. It serves to document how the organization’s strategic objectives will be achieved through specific marketing strategies and tactics, with the customer as the starting point. Also, to develop successful strategies and action programs, marketers require up-to-date information about the environment, the competition, and the market segments to be served. Scenario: you are running a hypothetical start-up company – Link. The company’s first product is the Link H One, a multimedia, cellular/Wi-Fi-enabled smartphone. Link will be competing with Apple, Samsung, Huawei, HTC and other well-established rivals in a crowded, fast changing marketplace for smartphones that combine communication, entertainment, and storage functionality. Link is preparing to launch Link H One in a mature market. This product offers a competitive unique combination of advanced features and functionality at a value-added price. The company plans to target specific segments in the consumer and business markets, taking advantage of opportunities indicated by higher demand for easy-to-use smartphones with expanded communications, entertainment, and storage functionality. The primary marketing objective is to achieve first-year U.S sale of 500,000 units. The primary financial objectives are to achieve first-year sales revenues of $75 million, keep first-year losses under $8 million, and break even early in the second year.

Personal Budget

At the beginning of the school year, Craig Kovar decided to prepare a cash budget for the months of September, October, November, and December. The budget must plan for enough cash on December 31 to pay the spring semester tuition, which is the same as the fall tuition. The following information relates to the budget:

a. Prepare a cash budget for September, October, November, and December. Use the minus sign to indicate cash outflows, a decrease in cash or cash payments.

b. What are the budget implications for Craig Kovar?

Craig can see that his present plan will not provide  sufficient cash. If Craig did not budget but went ahead with the original plan, he would be $__________ short  at the end of December, with no time left to adjust.

At the beginning of the school year, Craig Kovar decided to prepare a cash budget for the months of September, October, November, and December. The budget must plan for enough cash on December 31 to pay the spring semester tuition, which is the same as the fall tuition. The following information relates to the budget:

a. Prepare a cash budget for September, October, November, and December. Use the minus sign to indicate cash outflows, a decrease in cash or cash payments.

b. What are the budget implications for Craig Kovar?

Craig can see that his present plan will not provide  sufficient cash. If Craig did not budget but went ahead with the original plan, he would be $_____ short  at the end of December, with no time left to adjust.