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Your client Crimson Corp. (CC) is being audited by the Department of Revenue for the State of New York for the calendar year 2010. CC had been audited by the Internal Revenue Service (IRS) for 2010 and agreed with CC's tax position that the sale of the corporation's stock as described later, was primarily treated as the sale of goodwill. The issue in question is limited to a single question. CC is a Massachusetts (MA) corporation and has made an S election several years ago. The owner of the S corporation shares is a MA resident. It has been in business since 1998. It had operated exclusively in MA from 1998 until 2004 when it began to do business in New York. It has had minimal contacts in NY, hiring a few employees in NY but the majority of the business has been solicited through its MA based sales force. In 2010, approximately 45% of its operating income was apportioned to NY with the remainder allocated to MA. In 2010, the company was sold to NPD, a publicly traded company for $100 million. The proceeds from the sale of the company were allocated entirely to MA. Its normal operating profit was allocated as previously described. NYS is now asserting that 45% of the profit from the sale of the stock must be allocated to NY. How would you respond, on behalf of your client? Are there any arguments that you could make to rebut the NY's assertions?
Determine how the costs in (a) and (b) should be presented on Erin's financial statements as of December 31, 2008. Also determine the amount of amortization of intangible assets that Erin should record in 2008 and 2009.
A manufacturer of thermostats uses a kanban system to control the flow of materials. The packaging center processes 10 thermostats an hour and receives completed thermostats every 30 minutes. Containers hold 5 thermostats each.
The Tivoli Company has no debt outstanding, and its financial position is given by the following data: What would the value of the firm be after this debt-for-stock restructuring of the firm is completed? What would be the price of Tivoli's stock aft..
Distinguish between discretionary and committed fixed costs.
Prepare a fixed budget income statement for the planned level of sales and production. Prepare a fixed budget income statement for the actual level of sales and production.
Prepare a journal entry for the taxes of Winston County's General Fund on July 1, 2005, the date on which the property taxes for the fiscal ending June 30, 2006, were billed to taxpayers.
Discuss the major weakness of performance report. Describe clearly why all the variances for variable expenses are unfavourable (U).
A fire totally destroyed office equipment and furniture which Monica uses in her business. The equipment had an adjusted basis of $15,000 and a FMV of $10,000 before the fire.
Does a mobile home owned by a client qualify as real property or personal property for each state? What difference to the client would it be if it were classified as either?
For each of the following items, indicate whether it would be classified and reported under the operating activities (OA), investing activities (IA), or financing activities (FA) section of a statement of cash flows:
You are asked to make a depreciation schedule for a business asset. A depreciation schedule shows the remaining value of the asset at the end of each time period. Create a depreciation schedule for each of the following
Crown Industries has the following information about its standards and production activity for December-Assume the allocation base for fixed overhead costs is the number of units to be produced.
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