Kroger

I. Business EntitiesPartnerships and Corporations

Assume your company is involved in a major lawsuit and 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 it 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? Defend 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 or not 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?

V. Conclusion

There has been a major global crisis, and your company's board of directors has announced that the company is going bankrupt. No one could have seen this one coming. Your CEO has called you in to his office to start the insolvency process. Based on the latest published financial statements, your job is to come up with a plan that will be used to inform the company, its shareholders, and its creditors.

A. As your company's controller, compose a summary report to your CEO advising him on the effects of the insolvency.

B. From a global perspective, what effects would the insolvency of your company have on the U.S. economy as well as the global economy (i.e., other countries)?

C. Construct a worksheet for the CEO showing the effects of the insolvency on the company, shareholders, and creditors

II. Consolidations of Financial Statements

A. Based on research from your chosen company, explain the corporate structure in terms of consolidation. How is it 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? Defend your response.

In this assignment, 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

Illustrate how insolvencies impact business entities and their related stakeholders for informing recommendations