ACC 630 Final Project Guidelines and Ruic Overview According to the American Institute of Certified...

Question

ACC 630 Final Project Guidelines and Ruic  Overview According to the American Institute of Certified Public Accountants (AICPA), CPAs in today’s environment must not only have a high level of technical competence and a sense of commitment to service, but they must also have good communication and analytical skills and the ability to work well with people. Employers are looking for individuals who have the ability to analyze and evaluate complex business problems and the interpersonal skills and maturity to make decisions in a client and customer service environment.  In your final project for this course, you will apply your cumulative knowledge from the financial reporting courses you have taken to address advanced accounting topics. The topics in this course will integrate the accounting competencies needed to work in an organizational setting. You will apply accounting foundations to advanced, real-world situations by demonstrating knowledge and skills to determine solutions.  The project is divided into three milestones, which will be submitted at various points throughout the course to scaffold learning and ensure quality final submissions. These milestones will be submitted in Modules Three, Five, and Seven. The final project will be submitted in Module Nine.  In this assignment, you will demonstrate your mastery of the following course outcomes:    Differentiate between partnerships and corporations for selecting an appropriate business entity  Analyze the effects of consolidations on financial statements for proper reporting  Determine effective strategies for estate planning to minimize tax liability  Evaluate the need for trusts in various scenarios for income protection  Prompt For this project, imagine you are a new CPA in an accounting firm. You have been asked to prepare a report on the differences in accounting practices for partnerships versus corporations in different scenarios, such as a major lawsuit, consolidation, estate planning, and use of a trust. You are to use a particular large corporation as your comparative example. Choose one of the following: Walmart, Kroger, Amazon, Costco, The Home Depot, CVS Health Corporation, or Target. You don’t have to choose a particular partnership for comparison.  Specifically, the following critical elements must be addressed:  I. Business Entities—Partnerships and Corporations Assume your company is involved in a major lawsuit. The probable damages are estimated to be $2,000,000. A. Describe the effects damage estimates would have on the financial statements of a corporation and a partnership.B. How do disclosure requirements differ from a corporation to a partnership, and what information is required? C. Are the shareholders at risk for any personal liability with the company set up as a corporation? Defend your response. D. If your company was set up as a partnership, would the partners be at risk for personal liability? Defend your response.  II. Consolidations of Financial Statements A. Based on research from your chosen company, explain the corporate structure in terms of consolidation. How is the company organized from a consolidated viewpoint? What are the reasons for this particular type of organization? B. How does the consolidation impact how the accounting information flows into the consolidated financial statement? Describe the process. C. Are there any income tax benefits from consolidating the financial statements for your company? Support your response.  III. Estate Planning A. In terms of minimizing tax liability, how would estate planning differ from a partnership to a corporation? B. For estate planning purposes, what are the advantages of setting your business up as a corporation versus a partnership? Defend your response. C. Describe your company’s succession plan and whether it aligns with your company’s vision. D. Based on your responses, what estate planning strategy would be most effective in minimizing tax liability? Why?  IV. Trusts A. Draw a conclusion about the purpose for the company’s trust based on the research of your company. B. Why would a small business owner want to set up a trust, and how could it be used for estate planning purposes? C. Evaluate the similarities and differences between trusts and corporations. In an attempt to protect income, which would be most suitable for a company?  Milestones Milestone One: Business Entities—Partnerships and Corporations In Module Three, you will submit Section I of your final project. You will be asked to consider how, based on the type of entity, a given scenario might affect the company. This milestone will be graded with the Milestone One Ruic.   Milestone Two: Estate Planning In Module Five, you will submit Section III of your final project. You will be asked how estate planning affects tax liability strategy and succession planning. This milestone will be graded with the Milestone Two Ruic.  Milestone Three: Trusts In Module Seven, you will submit Section IV of your final project. You will be asked how the use of trusts affects estate planning and income protection. This milestone will be graded with the Milestone Three Ruic. Final Submission: Advanced Accounting Report In Module Nine, you will submit your final project. It should be a complete, polished artifact containing all of the critical elements of the final product. It should eflect the incorporation of feedback gained throughout the course. This submission will be graded with the Final Project Ruic. Deliverables Milestone Deliverable Module Due Grading  One Business Entities—Partnerships and Corporations Three Graded separately; Milestone One Ruic Two Estate Planning Five Graded separately; Milestone Two Ruic Three Trusts Seven Graded separately; Milestone Three Ruic Final Submission Advanced Accounting Report Nine Graded separately; Final Project Ruic  Final Project Ruic Guidelines for Submission: Your final submission should be 6 to 10 pages in length (excluding the title and references pages). Use one-inch margins, double spacing, and 12-point Times New Roman font. Sources should be cited using the latest APA style guidelines.  Critical Elements Exemplary (100%) Proficient (90%) Needs Improvement (70%) Not Evident (0%) Value Business Entities: Damage Estimate Meets “Proficient” criteria and description is exceptionally clear and contextualized Describes the effects the damage estimate would have on the statements based on the company being set up as a corporation Describes the effects the damage estimate would have on the statements, but does not base this on the company eing a corporation Does not describe the effects the damage estimate would have on the statements 6.8 Business Entities: Disclosure Requirements Meets “Proficient” criteria and uses relevant research to illustrate claims Identifies how disclosure equirements differ from a corporation to a partnership, and identifies what information is equired Identifies how disclosure equirements differ from a corporation to a partnership, ut not identify what information is required Does not identify how disclosure requirements differ from a corporation to a partnership 6.8 Business Entities: Personal Liability Meets “Proficient” criteria and defense is well supported and logical Determines whether the shareholders are at risk for any personal liability and defends esponse Determines whether the shareholders are at risk for any personal liability, but does not defend response or defense is weak or cursory Does not determine whether the shareholders are at risk for any personal liability 6.8Critical Elements Exemplary (100%) Proficient (90%) Needs Improvement (70%) Not Evident (0%) Value Business Entities: Partnership Meets “Proficient” criteria and defense is well supported and logical Determines whether the partners would be at risk for personal liability and defends response Determines whether the partners would be at risk for personal liability, but does not defend response or defense is weak or cursory Does not determine whether the partners would be at risk for personal liability 6.8 Consolidations: Corporate Structure Meets “Proficient” criteria and reasons are well qualified with concrete examples Explains how the corporate structure is organized from a consolidated viewpoint and the easons for this type of organization Explains how the corporate structure is organized from a consolidated viewpoint, but does not explain the reasons for this type of organization, or explanation is cursory or inaccurate Does not explain how the corporate structure is organized 6.8 Consolidations: Flows Meets “Proficient” criteria and description is exceptionally clear and contextualized Describes how the consolidation impacts how the information flows into the consolidated financial statement and describes the process Describes how the consolidation impacts how the information flows into the consolidated financial statement, but does not describe the process or description is cursory or inaccurate Does not describe how the consolidation impacts how the information flows into the consolidated financial statement 6.8 Consolidations: Income Tax Benefits Meets “Proficient” criteria and defense is well supported and logical Analyzes whether there are any income tax benefits from consolidating the financial statements and defends response Analyzes whether there are any income tax benefits from consolidating the financial statements, but does not defend response or defense is weak or cursory Does not analyze whether there are any income tax benefits 6.8 Estate Planning: Minimizing Tax Liability Meets “Proficient” criteria and uses relevant research to illustrate claims Explains how estate planning differs from a partnership to a corporation in terms of minimizing tax liability Explains how estate planning differs from a partnership to a corporation, but not in terms of minimizing tax liability Does not explain how estate planning differs from a partnership to a corporation 6.8 Estate Planning: Advantages Meets “Proficient” criteria and defense is well supported and logical Determines the advantages of setting up a business as a corporation versus a partnership for estate planning purposes and defends response Determines the advantages of setting up a business as a corporation versus a partnership for estate planning purposes, but does not defend esponse or defense is weak or cursory Does not determine the advantages of setting up a usiness as a corporation versus a partnership 6.8Critical Elements Exemplary (100%) Proficient (90%) Needs Improvement (70%) Not Evident (0%) Value Estate Planning: Succession Plan

Neenisha · Accepted Answer

FINAL PROJECT RUBRIC
 Introduction
This report tries to draw the comparison between partnership and corporations under several circumstances. First, an attempt has been made to compare the differences between the corporation and partnership in case of a contingent liability, in terms of damage estimates and personal liabilities. After this the concept of Estate planning has been discussed and how it is used for minimizing the tax liabilities by corporations and partnership firms. Then the succession plan in case of Estate planning has been discussed. Later the concept of Trusts is explained. Similarities and differences between the corporations and trusts have been highlighted to draw the comparison. The report also discusses the benefits of setting up Trusts to protect the income.
For reference purpose, Walmart Inc has been chosen as a company to discuss on the contingent liabilities and other criteria.
Walmart
Walmart Inc is an American multinational corporation which has a chain of department stores, grocery stores and hypermarkets. According to the Fortune Global 500 list in 2019 Walmart is biggest company by revenue in the world with the revenue of US $514.405 billion. It was listed on New York Stock Exchange in 1972.
The share price of Walmart as 20th March is USD 113.97.
In May 2018, Walmart intended to acquire 77% stake in Indian e-commerce company Flipkart. The deal was wrapped up in $16 billion and the valuation was $20 billion.
Business Entities – Partnerships and Corporations
Damage Estimates
The company is involved in a major lawsuit and the probable damages are estimated to be $ 200,000,000. This Lawsuit can be termed as a contingent liability for a firm. According to GAAP (Generally Accepted Accounting Principles), Contingent liabilities need to fulfil some criteria: (i) The future outcome needs to be probable i.e. it should likely to occur (ii) The amount of loss should be measurable.
Corporation:
For a company, it is important to disclose such information to the shareholder’s and the lenders as their huge stakes are involved. The stakeholder’s need to be informed about the probable losses as otherwise it would make their investments biased in case of undisclosed contingent liability. 
According to GAAP, contingent liabilities may be of three categories:
1. Probable: The future event is very much likely to occur than not to occur
2. Reasonable Possible: The probability of the future event is less than the probable event but more than the remote event.
3. Remote: The probability of the future event is very less.
While disclosing the information regarding the contingent liability, the probable contingent liability needs to be disclosed and reflected in the financial statements i.e. they will directly impact the financial statements. 
In case of Reasonable Possible contingent liabilities, they need to be reflected and disclosed in the footnotes of the balance sheet. They will not directly impact the financial statements, but the information will be disclosed to the shareholders. 
In case of Remote contingencies, the company has a right to choose between disclosing the information regarding it. The company may choose not to disclose it, however in certain cases if it is reporting then it should be disclosed in footnotes to balance sheet.
Example:
In case of Walmart, the contingent liabilities are disclosed in the footnotes to financial statement. Although, since the contingent liability is not probable, and the amount cannot be computed at this point they have explicitly mentioned in the annual report.
Partnership
Partnership follows Generally Accepted Accounting Principle (GAAP), as established by Financial Accounting Standard Board, to ensure the consistency in reporting.
Therefore, the contingent liabilities of $200,000,000 would be reported in the footnotes to the financial statements as per GAAP standards. Therefore, in case of disclosure there is no difference in terms of a corporation or a partnership.
Personal Liabilities
Corporation
In case of a company, according to GAAP all the shareholders enjoy the limited liability benefit. According to Limited Liability clause,

ACC 630 Final Project Guidelines and Rubric Overview According to the American Institute of Certified Public Accountants (AICPA), CPAs in today’s environment must not only have a high level of...

Solution

Answer To This Question Is Available To Download

Related Questions & Answers

Submit New Assignment