AC553_Wk6_You_Decide_Transcript

AC553_Wk6_You_Decide_Transcript - AC553 - Week 6 You Decide...

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AC553 - Week 6 You Decide (125 points) AC553_Wk6 _You Decide_Transcript.docx Page 1 You Decide Assignment Title: C Corporations Concluded Scenario Summary You represent a wealthy client who has decided to purchase a manufacturing company, Smithon Widgets (a C corporation), that has been very profitable. This client, Mr. Jones, is the majority shareholder of another C corporation. Johnson Services that has incurred significant losses. Mr. Jones comes to you with some questions and suggested outcomes. Role After reviewing Mr. Jones’ questions and recommendations, it will be your turn as a tax professional to decide on the best course of action from a tax perspective on the issues presented. Prepare a three page memo (at least 300 words per page) to Mr. Jones addressing the potential sale or merger of these two companies. Activity Given the scenario, your role and the information provided by the key player involved, it is time for you to make a decision. If you are finished reviewing this scenario, close this window and return to this week's You Decide item, in your course window, to complete the activity for this scenario. You can return and review this scenario again at any time. You Decide Content Item Info: Prepare a three page memo (at least 300 words per page) to Mr. Jones addressing the potential sale or merger of these two companies. Address his issues point by point: 1. Outright purchase of Smithon stock a. Should Mr. Jones purchase the stock of Smith outright, leaving Smithon intact? What about issuing debt in his Johnson Services company to pay for the Smith company – would that raise debt to equity issues? b. Should Mr. Jones convert Smithon to an S corporation and change the fiscal year end to a calendar year end? c.
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This note was uploaded on 02/21/2012 for the course ACCOUNTING 553 taught by Professor James during the Spring '12 term at DeVry Phoenix.

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AC553_Wk6_You_Decide_Transcript - AC553 - Week 6 You Decide...

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