Briefly explain the Australian tax law implications of each of the following scenarios, by citing relevant tax legislation and case law where appropriate.

1. XYZ Ltd is incorporated in UK and distributes watches in the Australian market. Half of the board of directors of XYZ Ltd resides in UK and the remaining board members reside in Australia. The board holds the majority of its meetings in Australia, where it makes high level decisions regarding the companys major contracts, finance, general policies and strategic directions in respect of its business operations. Is XYZ Ltd an Australian Resident for tax purposes? Please explain your answer.
2. Jenny establishes a sole accounting practice on 1 July 2016 and sets up a small office with a secretary. On 1 July 2019, her sole practice merges with an accounting firm comprising 60 partners and 500 employees. Should she use cash or accrual accounting before and after merging with the accounting firm? Please explain your answer.