1.Think about the primary difference between tax avoidance and tax evasion. Define and provide an example of each, and compare/contrast the typical consequences a taxpayer can expect from the Internal Revenue Service when s/he engages in either of the behaviors. In your response, identify the legal doctrines that the IRS typically uses to challenge a tax planning strategy.

2.Explain what is meant by an “implicit tax.” Define an implicit tax, and illustrate the concept by showing how a taxpayer’s marginal tax rate will determine whether s/he should invest $10,000 in a fully taxable corporate bond generating pretax interest of 8%, or a municipal bond generating pretax interest of 6%. At what marginal tax rate will an investor be indifferent between the two options?

Use the following information for questions 36-48

Transcendent Technologies is deciding between developing a complicated thought-activated software, or a simple voice-activated software. Since the thought-activated software is complicated, it only has a 30% chance of actually going through to a successful launch, but would generate revenues of $50million if launched. The voice-activated software is simple and hence has a 80% chance of being launched but only generates a revenue of $10million. The complicated technology costs 10million, whereas the simple technology costs 2million.

​If the simplified version costs $2 million and its probability of success is 75%, whereas the cost of the complicated version is $10million, what is the minimum probability of success for the complicated version that would make the firm indifferent between the two software?

Thompson Company is considering the development of two products: no. 65 or no. 66. Manufacturing cost information follows. No. 65 No. 66

Annual fixed costs $222,000 $340,000

Variable cost per unit 30 25

Regardless of which product is introduced, the anticipated selling price will be $50 and the company will pay a 10% sales commission on gross dollar sales. Thompson will not carry an inventory of these items.

1) Difference between breakeven volume (stated as revenue deollars) for the two products = $

2) Difference between profits of the two products at a sales level of 25,000 units = $

3) At what volume level (expressed as number of units), both products will generate the same level of profit? The volume level =

4) Margin of safety (expressed as a %) for product # 65 when the company is selling 16,000 units =

The Alaskan oil fields, in operation since 1977, had an estimated reserve of 4.9 billion barrels in 1999. In 2009, the fields had an estimated reserve of 3.5 billion barrels. Assume the rate of depletion is constant.

(a) Find a linear equation that relates the amount A, in millions of barrels, of oil left in the fields at any time t, where t is the year.

(b) If the trend continues, when will the fields dry out?

(c) Interpret the slope and y-intercept in this context.

(d) The Jack Field, discovered in the Gulf of Mexico off the coast of Louisiana in 2006, is estimated to contain up to 15 billion barrels of oil. At the same rate of depletion, how long will this field last?

The 2019 annual report for a company includes the following items in its footnotes:
a. The useful life of machinery has been increased from 10 to 15 years.
b. The expected tax rate used to calculate income tax provision has increased from 33% to 38%.
c. The company has started to capitalize small tools purchased beginning in 2006.

For each of the above, determine the effect (higher, lower, or unchanged) of the change on the ratios listed below for the year 2019 and state the reason for the effect (increase(s) and/or decrease(s) in which accounts cause the change):

a. Debt-to-equity
b. Return on assets
c. Cash Flow from operations

1. (5%) For each of the following data series, state what type of data you are dealing with and which type of graph (from the list below) would be best (the most effective way) to describe the data.

1. Column (bar) chart
2. Line chart
3. Pie chart
4. Box-plot
5. Histogram

Data series:

Need to answer what type of data and use which type of graph

1. The number of years since a person immigrated to Canada. These are individual level data collected as part of the 2006 census and are given for 11,000 people (i.e. there are 11,000 observations).

2. CPI in Canada, 1980 to 2015

3. Employment by major industry sectors across Canada in 2010.

From Dunkin Donuts to Just Dunkin! The famous American Donut’s brand is rebranding and closing stores across the world including Oman as its outlets have shut down for good. The demand for donuts in America is decreasing as customers preferring more healthy food with less sugar and fat.

The company’s brand CEO Mr. David Hoffmann said, “the rebranding comes as an effort to reshape the company’s strategic goals and focusing on drinks more than donuts.” While analyzing the company’s different products, the managers

noticed that 60% of its revenue is coming from drinks like coffee while demand for donuts is declining.

The company redesigned its brand, and its stores making them look simpler. The company is also introducing new coffee experiences like nitro, cold brew, black...etc. The company will also introduce digital menu and drive through to fit the customers on the go lifestyle. The company will also reduce its employees as the new digital menus will eliminate the need of human employees, reducing the company’s costs.

1. On the product life cycle, where the donuts fall? What are the best strategies the company can use in this case?
2. Explain, how the demographic environment is affecting the company?
3. Develop Integrated Marketing Communication for the new brand “Dunkin” (5Marks)
4. Do you agree or disagree with the company’s rebranding strategy? Support your opinion based on your knowledge of the factors influencing the buyer behavior.
5. Discuss the role technology plays in Dunkin donuts new strategy.

On January 1, 2021, the general ledger of 3D Family Fireworks includes the following account balances:

During January 2021, the following transactions occur:

The following information is available on January 31, 2021.

1. The company estimates future uncollectible accounts. The company determines $4,800 of accounts receivable on January 31 are past due, and 20% of these accounts are estimated to be uncollectible. The remaining accounts receivable on January 31 are not past due, and 5% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger.)
2. Supplies at the end of January total $900.
3. Accrued interest revenue on notes receivable for January. Interest is expected to be received each December 31.
4. Unpaid salaries at the end of January are $35,400.

Please prepare an unadjusted, adjusted, and post-closing trial balance.

On January 1, 2021, the general ledger of 3D Family Fireworks includes the following account balances:

During January 2021, the following transactions occur:

The following information is available on January 31, 2021.

1. The company estimates future uncollectible accounts. The company determines $4,800 of accounts receivable on January 31 are past due, and 20% of these accounts are estimated to be uncollectible. The remaining accounts receivable on January 31 are not past due, and 5% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger.)
2. Supplies at the end of January total $900.
3. Accrued interest revenue on notes receivable for January. Interest is expected to be received each December 31.
4. Unpaid salaries at the end of January are $35,400.

Please prepare an unadjusted, adjusted, and post-closing balance sheet.

Operating Cash Flows (Direct Method)
Lincoln Company owns no plant assets and reported the following income statement for the current year:

Additional balance sheet information about the company follows:

Calculate the net cash flow from operating activities using the direct method. Show a related cash flow for each revenue and expense.

Use negative signs in answers below to indicate a decrease in cash.

Do not use negative signs for this portion of the problem.