Bandung Corporation began 2020 with a $46,000 balance in the deferred tax liability account. At the end of 2020, the related cumulative temporary difference amounts to $350,000 and it will reverse evenly over the next 2 years. Pretax accounting income for 2020 is $525,000, the tax rat for all years is 20%, taxable income for 2020 is $405,000.

a) Compute income taxes payable for 2020

b) Prepare the journal entry to record income tax expense, deferred income taxes, and income tax payable for 2020

c) Prepare the income tax expense section of the income statement for 2020 beginning with the line "Income before income tax"

Background facts After graduating from your business degree at Central Queensland University you recently commenced working at a professional consulting services firm called “Squared Consulting” in the State or Territory in which you are undertaking your studies. You work in the legal compliance team and utilise your knowledge of commerce and law acquired from LAWS20059 to advise a diverse range of clients. You specialise in advising clients on how Australian law governs business structuresin the operation of commercial activities. Giovanni is a trained pizza maker who worked for 10 years as the head pizza maker at a national pizza chain called “Molto Bene”. His wife, Sandra, said to him one day: “your pizzas are terrific, you should start a pizza shop”. Giovanni thought that was a wonderful idea, so he began planning the grand opening of his new pizza shop. However, he only had $100,000 and the cost of starting a pizza shop was approximately $300,000 so he needed to either borrow money or invite partners to join him in the business. His aunt, Leanne, and uncle, Mick, each had about $100,000 in savings and they were keen to get into a pizza making business. They want to maintain a family business, so they do not want any outside investors. Giovanni, Leanne and Mick go into business together and they each contribute $100,000 into the business. They call the pizza shop “Dough Magic” and they charge $19 per pizza, which gives them approximately $4 profit on each pizza if they are sold. They agree that Giovanni will receive 50% of the profits, Leanne will receive 25% of the profits and Mick will receive 25% of the profits. They want to keep start up, regulatory and compliance costs to a minimum and they all want to participate in running the business. They also want to protect their personal assets. Giovanni, Leanne and Mick organise a meeting with your firm because they have a number of questions about different business structures.

Part A – BUSINESS STRUCTURES To prepare for the client meeting your supervisor, Jonathan, asks you to write a report which:

1. identifies two legal differences between a sole trader and a partnership.

2. explains a legal partnership on the one hand, and a company on the other.

3. explains one way a business would use a truststructure, the role of each participant in the trust and identifies the three elements required for a valid express trust. In Part A you must write a written report which addresses all the above points.

15 marks – 1,000 words maximum

Part B – COMPANIES AND THE CORPORATE VEIL

The pizza shop is doing well and making a profit. In fact, the pizza shop is doing so well that they need to hire a pizza maker, Fabio. Fabio’s employment contract contains a non-competition clause which is designed to stop him from competing with “Dough Magic” if he ever leaves. Fabio does decide to leave Dough Magic, but he registers a company, Kings of Dough Pty Ltd, which he uses to run a competing pizza shop which trades as “Kings of Dough”. Fabio is the sole director and shareholder of the company. Giovanni, Leanne and Mick learn about “Kings of Dough” and they want to know whether they can take any legal action against Fabio and/or Kings of Dough Pty Ltd. They have heard that companies have separate legal identity, so they are confused about whether they can sue for breach of contract and have the contract enforced. Giovanni, Leanne and Mick make another appointment with your firm for a consultation. To help prepare for the meeting, your supervisor, Jonathan, wants you to write a report for him. In Part B you must write a report which: 4

1. identifies one case law authority which relates to the separate legal personality principle in company law.

2. explains the separate legal personality principle and the concept of the corporate veil.

3. explains the respective role of shareholders and directors of a company.

4. advises whether the corporate veil can be lifted in this circumstance, and what it means for the corporate veil to be lifted. You must identify and apply one case law authority on point.

15 marks – 1,000 words maximum

Part C – ORAL PRESENTATION In Part C you are required to record a 5-minute oral presentation (of no more than 5 minutes in duration) with the use of a visual aid (such as a PowerPoint presentation, a chart, etc). Your supervising partner, Jonathan, has asked you to brief your team on your work advising Giovanni, Leanne and Mick. In your presentation, you must reflect on your reports for the meetings with Giovanni, Leanne and Mick to explain:

1. what business structure you would recommend for the pizza shop.

2. what you learned about the separate legal identity of companies from completing Part B of your assignment.

3. what you learned about veil piercing from completing Part B of your assignment.

Note: You will need to upload your presentation to and provide a link to your presentation in Part C of your assignment answer. Your recorded presentation must be accessible to the marker.

QUESTION THREE                                                                                                              

Joe Soap owns a general dealer business situated in Umzinto. The following information was provided for Joe’s General Dealers for the financial year ended 28 February 2020.

Joe’s General Dealers

Additional information

1. Physical stock-take on 28 February 2020 revealed the following Inventories on hand;

• Trading inventory                                                 R228 250, and
• Consumable inventory: packing material            R3 600

2. A new tenant rented a portion of the premises from 1 March 2019. According to the rental agreement the rent for the period 1 March 2019 to 31 March 2020 was R1 500 per month. Rent is usually received in advance ie. rent is received in the month before it is due. For example; the April 2019 rent was received during March 2019.
3. Commission income of R10 800, earned in February 2020, has not yet been received nor recorded.
4. Electricity and water of R1 600 for February 2020 has not been paid and is not yet included in the above records.
5. The long term loan from People’s Bank was obtained on 1 September 2016 at an interest rate of 11,5% per year. The loan was payable in four (4) equal annual instalments. The first instalment was paid on 31 August 2019. The second instalment is payable on 31 August 2020. Interest is paid during March each year.
6. A debtor who owes Joe’s General Dealers R12 680 cannot be traced. His account must be written-off as irrecoverable.
7. The insurance account balance of R25 725 covers the period 1 March 2019 to 30 April 2020. The monthly insurance premium remained unchanged during this period.
8. Provide for depreciation for the year as follows:

• Vehicles – at 10% per year on straight line method, and
• Equipment – at 14% on the diminishing balance method.

      There were no purchases or sales of the above items during the current financial year.

Required:

Use the above information to prepare the statement of profit and loss and other comprehensive income for Joe’s General Dealers for the year ended 28 February 2020.         

Your answer must comply with International Financial Reporting Standards that are appropriate to this type of business.

Round off all amounts to the nearest rand.

All calculations must be shown

C PROGRAM

Problem Specification:

You are a software engineer of a Car Sale company. And Car Sales is preparing for the end of the year sale. CEO wants to track the sales of your four sales people. You have been asked to help with the preparations for the sales event.

The CEO asked for a program to quickly tabulate their sale. It will be your job to implement this program in C. You are not required to use functions in this lab. Your program will need to perform the following tasks to receive full credit for this assignment:

Read a list of final sales of each sales person into a one-dimensional array.

• Calculate the percentage of each sales person of the total sales.
• Print each individual sales percentage.
• Print the total sales
• The array will be of type double.
• Sales will be printed 2 decimal places and the percentage listed with 1 decimal place showing.

Testing:

Try this set of sales, for your test run. $182,550.92        $239,557.34      $98,278.88        $ 411,642.47

Input:

Enter the sales for Sales Person 1: 182550.92

Enter the sales for Sales Person 2: 239557.34

Enter the sales for Sales Person 3: 98278.88

Enter the sales for Sales Person 4: 411642.47

Output:

Sales Person Percentage of Sale

Sales Person 1: 19.6%

Sales Person 2: 25.7%

Sales Person 3: 10.5%

Sales Person 4: 44.2%

Total Sales for Event: $932029.61

42–3. Insider Trading.

Scott Ginsburg was chief executive officer (CEO) of Evergreen Media

Corp., which owned and operated radio stations. In 1996, Evergreen became interested in

acquiring EZ Communications, Inc., which also owned radio stations. To initiate negotiations,

Ginsburg met with EZ’s CEO, Alan Box, on Friday, July 12. Two days later, Scott phoned his

brother Mark, who, on Monday, bought 3,800 shares of EZ stock. Mark discussed the deal with

their father Jordan, who bought 20,000 EZ shares on Thursday. On July 25, the day before the

EZ bid was due, Scott phoned his parents’ home, and Mark bought another 3,200 EZ shares.

The same routine was followed over the next few days, with Scott periodically phoning Mark or

Jordan, both of whom continued to buy EZ shares. Evergreen’s bid was refused, but on August

5, EZ announced its merger with another company. The price of EZ stock rose 30 percent,

increasing the value of Mark and Jordan’s shares by $664,024 and $412,875, respectively. The

Securities and Exchange Commission (SEC) filed a civil suit in a federal district court against

Scott. What was the most likely allegation? What is required to impose sanctions for this

offense? Should the court hold Scott liable? Why or why not? [

SEC v. Ginsburg,

362 F.3d 1292

(11th Cir. 2004)]

The Washington Capitals recently won the National Hockey League’s Stanley Cup championship, and there was a parade on June 12 to celebrate. Let’s say 500,000 people attended the parade. We want to interview (sample) some of the Capitals fans at the parade to find things out about Capitals fans in general. Suppose we believe that the standard deviation of Capitals fans’ income is $20,000 (close to the overall standard deviation of American incomes). We sample 45 Capitals fans at the parade (some people declined to give a response, but 45 people did give answers) and find that these 45 fans have a mean income of $58,500.

a)Assuming this is a valid, random sample, specify a 95% confidence interval of what we think the mean of the population is given this sample. Please justify which statistic you use (t or z).

b)One Capitals fan, during the interviews, says he thinks that the mean income of Capitals fans is $61,000. Does our sample (again, let’s assume it’s a valid sample), support his belief?

c)If the fan from part b is correct, what is the probability of a sample of 45 Caps fans having a mean income less than or equal to $58,500?

d)How many fans do we need to interview to be 95% confident that we have a sample mean within $2,000 of the population mean.

e)Explain two ways that this sampling method is biased (remember that we are trying to estimate the mean income of all Capitals fans) – you don’t necessarily need to name the type of bias involved, but just explain two things wrong with it.

The Association of Sugar Cane Growers in the country plans to form a Company. The association is not sure yet on the kind of business they should venture in though they know that it should be in the sugar cane industry. The company should either be producing sugar known as option C, or producing biofuel referred to option D or just produce sugar cane and sell to sugar-producing organizations - option E. Information pertaining to investment requirements is given in the table below. The costs/revenue are in US $.

Using a discount rate 0f 12%

Using the Capital Asset Pricing Model *(CAPM) and the Betas from the table below, along with market parameters shown below, what is the required return for Ford Motor Co.? (round your answer to two decimal places)

Company Beta

US Steel 1.77

Ford Mo Co 1.31

General Electric 1.20

Boeing   0.94

Amazon   0.90

Starbucks 0.79

McDonalds 0.51  

Walmart 0.26

Market Details

Current T-Bill Price 985.12

Historic Average T-Bill Return 2.3%

Current Market Return 8.5%

Historic Average Market Return   8.9%

B) Review the table below. Beta is a measure of sensitivity, showing how the returns of an individual investment compare to the returns of the Market as a whole. Beta is measured by analyzing actual historic Market returns. Starbucks sells coffee. What might explain why a company like Starbucks has its Beta at that level ?  

what is the microeconomics concept or model that explains below behavior. explain.

1) company A, a competitor of B in the same market segment nevertheless supplies Company B with many of the components that B needs.

2) controversy in spain last year over the payment of a tax on the creation of mortgages. In response to popular pressure, the govt decreed that this tax be paid entirely by the bak from now on, and not by consumer. Banks did not push back against this policy change, despite many folks views that they have a strong case if they chose to fight the government decree in court

3) while country A has emerged as a world leader in the design and production of industrial robots, most of its production is sold internationally, with less than 1% purchased by manufacturing companies in the country A. In fact, robot statistics show a very low degree of automation of the manufacturing industry in country A: 0.0003 robots/worker, as opposed to 0.0085 worldwide, 0.02 in US or 0.03 in japan.