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Scenario - Ahi Corporation is one of your clients in Hawaii. The company had a good year last year and owes the IRS $100,000,000, due on March 15. There are no penalties or interest due to the IRS. One of Ahi's employees approaches you with the following plan to benefit from the so- called " float" on the large payment due to the government. First, Ahi Corp. will courier its tax return and payment to the U.S. Virgin Islands. There, the tax return will be mailed to the IRS Service Center in Fresno by certified mail on the return's due date, March 15. By doing this, the employee thinks it will take at least six days for the tax return to reach the IRS and for them to cash the $100,000,000 check. Ahi can earn 7 percent after tax on its money, so the interest earned during these six days because of the float is $19,178 per day [($100,000,000 × .07/ 365 days]. Thus, the total interest earned on the float for six days would be $115,068 ($19,178 × 6 days).
1. Would you recommend Ahi complete this transaction? 2. What potential ethics issues do you see in this situation? 3. Which AICPA Code(s) of Professional Conduct rules apply in this situation (explain how and why they apply)? 4. Which Statement(s) on Standards for Tax Services apply in this situation (explain how and why they apply)?5. Cite the specific verse(s) for at least one Biblical principle that you feel is relevant to the situation (explain how and why it applies).
Strong Wood Company is a distributor of patio furniture. Data concerning the next month's budget appear below. What is the company's margin of safety? What is the company's margin of safety as a percentage of sales?
What GASB statement requires government wide statements and why? This answer should include a comment on the measurement focus and basis of accounting used.
Crone Enterprises uses a word processing computer to handle its sales invoices. Lately, business has been so good that it takes an extra 3 hours per night, plus every third Saturday, to keep up with the volume of sales invoices.
Calculate the multifactor productivity composed of labor and capital units shipped plus finished goods for PCCorp. In place of fixed costs use (sales + finished goods)
Under GAAP, an entry should be made to the bad debt expense account
It is now July 31st. You are continuing to advise Dr. Leo Krusack on basic accounting procedures. His practice had the following transactions during July.
Reisner Company assembled the following information in completing its March bank reconciliation: balance per bank $11,460; outstanding checks $2,325; deposits in transit $3,750; NSF check $240; bank service charge $75; cash balance per books $13,200...
Sidney purchased land in 2004 for $35,000 that she held as a capital asset. This year, she contributed the land to the Boy Scouts of America for use as a site for a summer camp. The market value of the land at the date of contribution is $40,000. ..
During 2006, NICO Corporation had EBIT of $100,000, a change in net fixed assets of $400,000, an increase in net current assets of $100,000, an increase in spontaneous current liabilities of $400,000, a depreciation expense of $50,000, and a tax r..
Brian purchased 500 shares of the substantially identical stock for $3,000. What is the tax effect fir Brian as well as what will be the basis of each of four batches of new stock?
Peanut corporation exchanged land and cash of $6,500 for equipment. the land had a book value of $45,000 and a fair value of $34,000. assume the exchange has commercial substance. compute the gain or loss?
For the expenditure cycle at Hewlett-Packard or any other company, what's your suggestion for the following recommendations to have good internal control of the purchase order processing?
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