Need help with the final project ACC 630, The attached file includes rubric and guidelines! The part which is required to be addressed is the 5th part!

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 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 purpose of this project is to continue to build upon your foundational competencies, including communication, quantitative, and analytical thinking and problem solving, human relations, and technology through a cumulative case study built on a real-life company. 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 Illustrate how insolvencies impact business entities and their related stakeholders for informing recommendations Prompt You will continue to work with the retail company that you chose in ACC 610 or, if you transferred into ACC 620, you will continue with the retail company you chose from the following options: Wal-Mart, Target, Sears, Kroger, or Amazon. You have adopted this company to apply learning concepts in authentic scenarios. Through this project, you will conclude your portfolio that you have been assembling throughout the financial reporting series. Your portfolio pieces for this project will include a financial analysis paper, spreadsheets to be included in that analysis paper, and a summary report. Specifically, the following critical elements must be addressed: I. Business EntitiesPartnerships 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 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 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. Milestones Milestone One: Business EntitiesPartnerships and Corporations In Module Three, you will submit the Section I of your final project. You will be asked to consider how, based on the type of entity, a given scenario may affect the company. This milestone will be graded with the Milestone One Rubric. Milestone Two: Estate Planning and Trusts In Module Five, you will submit Sections III and IV of your final project. You will be asked how estate planning and trusts affect tax liability and the protection of income. This milestone will be graded with the Milestone Two Rubric. Milestone Three: Consolidations of Financial Statements In Module Seven, you will submit Section II of your final project. You will be asked the about the purpose and effects of consolidated financial statements. This milestone will be graded with the Milestone Three Rubric. Final Submission: Advanced Accounting Portfolio 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 reflect the incorporation of feedback gained throughout the course. This submission will be graded with the Final Project Rubric. Deliverables Milestone One Two Three Deliverable Business EntitiesPartnerships and Corporations Estate Planning and Trusts Module Due Three Grading Graded separately; Milestone One Rubric Five Graded separately; Milestone Two Rubric Consolidations of Financial Statements Seven Graded separately; Milestone Three Rubric Final Submission: Advanced Accounting Portfolio Nine Graded separately; Final Project Rubric Final Project Rubric Guidelines for Submission: Your final submission should be 6 to 10 pages in length (in addition to spreadsheets) and should use one-inch margins, double spacing, and 12-point Times New Roman font. Sources should be cited according to APA style. Instructor Feedback: This activity uses an integrated rubric in Blackboard. Students can view instructor feedback in the Grade Center. For more information, review these instructions. Critical Elements Business Entities: Damage Estimate Business Entities: Disclosure Requirements Business Entities: Personal Liability Business Entities: Partnership Consolidations: Corporate Structure Exemplary Meets \"Proficient\" criteria and description is exceptionally clear and contextualized (100%) Proficient Describes the effects the damage estimate would have on the statements based on the company being set up as a corporation (90%) Needs Improvement Describes the effects the damage estimate would have on the statements, but does not base this on the company being a corporation (70%) Meets \"Proficient\" criteria and Identifies how disclosure Identifies how disclosure uses relevant research to illustrate requirements differ from a requirements differ from a claims (100%) corporation to a partnership and corporation to a partnership, but what information is required (90%) not what information is required (70%) Meets \"Proficient\" criteria and Determines whether the Determines whether the defense is well supported and shareholders are at risk for any shareholders are at risk for any logical (100%) personal liability and defends personal liability, but does not response (90%) defend response or defense is weak or cursory (70%) Meets \"Proficient\" criteria and Determines whether the partners Determines whether the partners defense is well supported and would be at risk for personal would be at risk for personal logical (100%) liability and defends response liability, but does not defend (90%) response or defense is weak or cursory (70%) Meets \"Proficient\" criteria and Explains how the corporate Explains how the corporate reasons are well qualified with structure is organized from a structure is organized from a concrete examples (100%) consolidated viewpoint and the consolidated viewpoint, but does reasons for this type of not explain the reasons for this organization (90%) type of organization or explanation is cursory or inaccurate (70%) Not Evident Does not describe the effects the damage estimate would have on the statements (0%) Value 5.7 Does not identify how disclosure requirements differ from a corporation to a partnership (0%) 5.7 Does not determine whether the shareholders are at risk for any personal liability (0%) 5.7 Does not determine whether the partners would be at risk for personal liability (0%) 5.7 Does not explain how the corporate structure is organized (0%) 5.7 Consolidations: Flows Meets \"Proficient\" criteria and description is exceptionally clear and contextualized (100%) Describes how the consolidation impacts how the information flows into the consolidated financial statement and describes the process (90%) 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 (70%) Consolidations: Meets \"Proficient\" criteria and Analyzes whether there are any Analyzes whether there are any Income Tax defense is well supported and income tax benefits from income tax benefits from Benefits logical (100%) consolidating the financial consolidating the financial statements and defends response statements, but does not defend (90%) response or defense is weak or cursory (70%) Estate Planning: Meets \"Proficient\" criteria and Explains how estate planning Explains how estate planning Minimizing Tax uses relevant research to illustrate differs from a partnership to a differs from a partnership to a Liability claims (100%) corporation in terms of minimizing corporation but not in terms of tax liability (90%) minimizing tax liability (70%) Estate Planning: Meets \"Proficient\" criteria and Determines the advantages of Determines the advantages of Advantages defense is well supported and setting up a business as a setting up a business as a logical (100%) corporation versus a partnership corporation versus a partnership for estate planning purposes and for estate planning purposes, but defends response (90%) does not defend response or defense is weak or cursory (70%) Estate Planning: Meets \"Proficient\" criteria and Describes the company's Describes the company's Succession Plan description is exceptionally clear succession plan and whether it succession plan, but does not and contextualized (100%) aligns with the company's vision describe if it aligns with the (90%) company's vision or description is cursory or inaccurate (70%) Estate Planning: Meets \"Proficient\" criteria and Determines which strategy would Determines which strategy would Strategy defense is well supported and be most effective and defends be most effective, but does not logical (100%) response (90%) defend response or defense is weak or cursory (70%) Trusts: Conclusion Meets \"Proficient\" criteria and Draws a conclusion about the Draws a conclusion about the cites sources that are aligned with purpose for the trust based on the purpose for the trust, but conclusion (100%) research of the company (90%) conclusion is cursory or inaccurate (70%) Does not describe how the consolidation impacts how the information flows into the consolidated financial statement (0%) 5.7 Does not analyze whether there are any income tax benefits (0%) 5.7 Does not explain how estate planning differs from a partnership to a corporation (0%) 5.7 Does not determine the advantages of setting up a business as a corporation versus a partnership (0%) 5.7 Does not describe the company's succession plan (0%) 5.7 Does not determine which strategy would be most effective (0%) 5.7 Does not draw a conclusion about the purpose for the trust (0%) 5.7 Trusts: Estate Meets \"Proficient\" criteria and Planning Purposes cites specific, relevant examples to establish a robust context for the determination (100%) Trusts: Protect Income Conclusion: Insolvency Conclusion: Economy Conclusion: Worksheet Articulation of Response Determines why a small business owner would want to set up a trust and how it could be used for estate-planning purposes (90%) Determines why a small business owner would want to set up a trust, but does not determine how it could be used for estateplanning purposes or determination is cursory or inaccurate (70%) Meets \"Proficient\" criteria and Evaluates the similarities and Evaluates the similarities and uses concrete examples to differences between trusts and differences between trusts and substantiate claims (100%) corporations and determines corporations, but does not which would be most suitable to determine which would be most protect income (90%) suitable to protect income or determination is inaccurate (70%) Meets \"Proficient\" criteria and Composes a comprehensive Composes a summary report to the uses industry-specific language to summary report to the CEO CEO advising on the effects of the establish expertise (100%) advising on the effects of the insolvency, but the report contains insolvency (90%) gaps in accuracy or lacks detail (70%) Meets \"Proficient\" criteria and Determines the effects of the Determines the effects of the determination is well supported insolvency on the U.S. economy as insolvency on the U.S. economy or and contextualized (100%) well as the global economy (90%) the global economy, but not both or determination is inaccurate (70%) Constructs a worksheet accurately Constructs a worksheet showing showing the effects of the the effects of the insolvency on the insolvency on the company, company, shareholders, and shareholders, and creditors (100%) creditors, but worksheet contains inaccuracies (70%) Submission is free of errors related Submission has no major errors Submission has major errors to citations, grammar, spelling, related to citations, grammar, related to citations, grammar, syntax, and organization and is spelling, syntax, or organization spelling, syntax, or organization presented in a professional and (90%) that negatively impact readability easy to read format (100%) and articulation of main ideas (70%) Does not determine why a small business owner would want to set up a trust (0%) 5.7 Does not evaluate the similarities and differences between trusts and corporations (0%) 5.7 Does not compose a summary report (0%) 5.7 Does not determine the effects of the insolvency on the economy (0%) 5.7 Does not construct a worksheet (0%) 5.7 Submission has critical errors related to citations, grammar, spelling, syntax, or organization that prevent understanding of ideas (0%) 3.1 Total 100% Running head: ESTATE PLANNING AND TRUSTS Estate planning and Trusts Prof: Piper ACC 630 Ismail Amar Southern New Hampshire University June 27, 2016 1 ESTATE PLANNING AND TRUSTS 2 Estate Planning There are quite a number of ways in which the tax liability for estate can be minimized through a proper estate planning. These ways differ in one way or another with the strategies used to minimize or reduce tax liability in partnerships and corporations. To begin with are the marital transfers. Unless a spouse is not a citizen, neither lifetime gifts nor bequests at death to one's spouse are subject to estate taxes. However, the estate of the spouse will have to pay estate taxes on the spouse's entire taxable estate, including the amount transferred to the spouse pursuant to the lifetime transfer, at the spouse's death. Accordingly, this tool merely defers estate taxes; it does not entirely eliminate them. Another important tool is the lifetime gifts to children and grandchildren. Each person can make annual gifts of $12,000 to any number of persons, typically children or grandchildren, without incurring a gift tax. If a husband and wife both engage in gifting, they can collectively give away $24,000 per year per recipient without incurring a gift tax. Over a period of several years the amount of money that can be transferred to a couple's intended beneficiaries under this method is substantial, thereby reducing the size of the taxable estate. Lastly, are the charitable transfers? Lifetime charitable transfers or gifts to charities upon death can reduce the size of the estate and thereby reduce estate taxes. Lifetime gifts provide the added benefit of an income tax deduction. Gifts can also be made in a manner that lets the donor retain the right to use the gifted asset or income there from until death. ESTATE PLANNING AND TRUSTS 3 Partnerships and corporations do not make use of such tools as they are structured in a way that may not allow them to reduce their tax liabilities. This occurs due to the distinct boundaries that exist among various business units. Advantages of Corporations over Partnership in Relation to Estate Planning An LLC offers a flexible form in comparison to partnerships, which makes it an attractive choice for use as an estate planning instrument. In addition the management of an LLC is not based on ownership, one generation can transfer the assets held by an LLC to the next generation without giving up control. Moreover, LLCs can use transfer restrictions in order to protect assets against potential creditors of members, and children's ex-spouses. In this case, the appreciation in the value of an LLC's assets is not includible in the taxable estate of the transferor; only the value of any retained interest in an LLC will be taxed. The company's succession plan is to transfer the assets or the business to the next generation while at the same time minimizing the tax liability. This is in line with the company's vision. The best strategy to minimize tax liability will be to transform the business into a limited liability company so as to enjoy the tax minimization and other benefits. Trusts The main purpose of trust is separating control from beneficial ownership, whereby the structure of a trust allows a business or asset to be put into the hands of a third party (trustee) who is given legal control and has a duty to operate that business or manage these assets to benefit someone else (beneficiaries). This is known as a 'fiduciary duty'. In this case, the ESTATE PLANNING AND TRUSTS 4 appreciation in the value of an LLC's assets is not includible in the taxable estate of the transferor; only the value of any retained interest in an LLC will be taxed. For the small business owner who will be the beneficiary of the trust may get expertise from the trustee for his business. In a trust the beneficiary has no control directly into the assets since they are controlled by the trustee. Similarly, in a corporation, the shareholders are not in control of the company assets, but the directors of the company. There exists a fiduciary relationship in both cases. Both also own both tangible and intangible assets. However, a difference between the two comes in the fact that a company can control the assets of other entities, as long as it holds the majority stocks of those companies, and has majority voting rights. Whereas, a trust can only manage the assets in accordance with the trust deed terms. ESTATE PLANNING AND TRUSTS 5 References: Veasey, Westray B.; Craig G. Dalton Jr.; Poyner Spruill LLP (May 24, 2013). "Why You Need an Estate Plan Post 2013 Tax Act". The National Law Review. Retrieved 26 May 2013. Estate Tax". IRS. Retrieved 27 May 2015. Beginner's Guide to Estate Planning". LegalNature.com. LealNature. Retrieved October 4, 2015. Running head: CONSOLIDATION OF FINANCIAL STATEMENTS Consolidation of Financial Statements Prof: Piper ACC 630 Ismail Amar Southern New Hampshire University July 11, 2016 1 CONSOLIDATION OF FINANCIAL STATEMENTS 2 The Corporate Structure in terms of Consolidation In the recent past, there has been an increased need for most public and privately owned companies to periodically prepare, review and consolidate their financial statements. Structured corporations can be defined as entities that have been outlined with the goal that voting rights are not the prevailing factor in choosing who controls the entities. The corporate structuring is aimed at meeting the high standards set by the International Financial Reporting Standards (IFRS) on comprehensive disclosure of interests and accounting standards. In addition, corporate structuring also decreases the costs or expenses incurred in setting up the consolidated financial statements of business enterprises made up of organizations conducting business all around the globe. However, with the rapid increase in globalization of financial entities and related markets, the utilization of monetary reporting standards in most corporate organizations is seen as having expanded the consolidation and comparability of financial information. Therefore, the decision taken by the FT Group Subscriptions to continuously guarantee its clients get the maximum profit from their investments by offering a scope of tools to help them channel and tailor FT insights and news. The FT Group has organized its corporate structure in such a way that its customers get to customized feeds of data effectively inside their workflows and frameworks. Singular clients in the group subscriptions are likewise trained and supported to quicken adoption and utilization of the support to accomplish their business objectives. [Mak16]. There are various reasons for many business organizations and institutions to make FT Group Subscriptions their preferred business choice. For instance; CRU utilizes Financial Times (FT) services in strengthening its position as an idea leader by delivering timely and relevant advice to clients. CONSOLIDATION OF FINANCIAL STATEMENTS 3 Linklaters LLP utilizes the FT to increase their Lawyer's customer commercial awareness. CNC utilizes the Financial Times to collect market intelligence, give their clients maximum support and win new contracts. The London stock exchange continuously adapts to the changing technological world with the aid of Financial Times. Employees of major lending institutions heavily depend on Financial Times for essential intelligence services. Impact of a Consolidated Corporate Structure on the Accounting Information Flows An FT Group Subscription gives the pricing and data conveyance components to help associations and institutions embed the FT at scale and fully exploit the overall value of the market intelligence. However, the consolidation of the financial statements greatly impacts the flow of accounting information from one corporate entity to the other. Normally, a structured corporate entity has stringently confined activities, a limited or well-stipulated objective, negligible value and is financed by different authoritatively connected instruments. It is not abnormal for back up plans such as FT to create organized corporate entities to facilitate specific financial transactions such as the reinsurance of risks into a reasonably defined vehicle.[Mak16]. Ideally, under these unit-connected policies, a financial service provider such as FT guarantees to make installments to policyholders in view of the execution of a predefined pool of benefits (or records) and the backup plan buys resources to match these connected liabilities. Connected liabilities are for the most part measured as the result of the quantity of units issued to policyholders and the pertinent asset unit cost. CONSOLIDATION OF FINANCIAL STATEMENTS 4 Consolidating the financial statements for your company more often helps you obviously track your investments and give the chance to effectively broaden your portfolio, manage the risks and maintain a strategic distance from duplication of your investment. Consolidation may likewise make the procedure of rebalancing your portfolio simpler to oversee. Therefore, tax treatment for income investment at most relies on the revenue type for instance interest, profits or capital gains) and the record type in which the revenue is generated. For instance, income earned from interests in your Retirement Savings Plan (RSP) is exempted from tax until the benefits are withdrawn. That is to say, withdrawals are for the most part 100% assessable in view of your marginal tax rate.[Pot11]. References Make informed decisions with a Financial Times Group Subscription. (2016). The Financial Times Limited , 13-89. CONSOLIDATION OF FINANCIAL STATEMENTS 5 Potential Benefits of Consolidating Your Assets. (29th September 2011). TD Wealth Private Trust , 2-9. Running head: BUSINESS ENTITIES - PARTNERSHIPS AND CORPORATIONS Business entities - partnerships and corporations Prof: Piper ACC 630 Ismail Amar Southern New Hampshire University June 14, 2016 1 BUSINESS ENTITIES - PARTNERSHIPS AND CORPORATIONS 2 Loss in the Lawsuit Since there is an expected chance of loss in the lawsuit, both the corporation and partnership firm would have to create a provision for the lawsuit. This will lead to the reduction in the profit of the company. Therefore, for the Sears Company, the probable damages of $2000000 should be shown in the financial statement through reducing net income and increasing liabilities. This would further affect the Sears financial status which is constantly deteriorating on every financial reporting. This will scare investors because not many would be willing to invest in a non-profitable company due to fear of losing their investment. b) There exist differences between the two types of companies in the way it deals with public disclosure. For a public United States company that trades on a United States stock exchange is usually required to file periodic earnings reports with the Securities and Exchange Commission (Carney W. J, 2006). This information is also made available to shareholders and the public. Partnerships, on the other hand, are private companies and are not required to disclose their financial information to anyone since they do not trade stock on a stock exchange. The information required when reporting for a corporate company include the director's particular, shareholding pattern, public holding, corporate social responsibility as well as the accounting standard followed or not. On the other hand, the partnership firm should provide information on the particulars of partners, share in the partnership, salary and interest paid to partners and any change in Capital. Therefore, Sears been a public traded corporation should disclose the probable loss of $2000000 on account of the lawsuit and be given in the notes to accounts of the company depending on the circumstances of the cases as on the date of disclosure. BUSINESS ENTITIES - PARTNERSHIPS AND CORPORATIONS 3 c) Based on the company's profit and loss sharing agreement, the shareholders are only liable to the extent of the value of their shares and not more than that. Hence, if the company lawsuit damages of $2000000 exceed their shares, the shareholders will only pay the value equivalent to their shares while the remaining value would be paid by the company. d) Yes, the partners could be held personally liable, however, their liability will depend on the form of partnership and circumstances of the case. For example, in limited partnership general partners are personally responsible for the liabilities while limited partners can only lose their status and be held personally responsible for business liabilities if they are found to be actively involved in the management of the business (Ireland, P. 2010). BUSINESS ENTITIES - PARTNERSHIPS AND CORPORATIONS 4 References Carney W. J, & Emory L. J., (2006). Costs of Being Public after Sarbanes-Oxley: The Irony of Going Private. Ireland, P. (2010). Limited liability, shareholder rights and the problem of corporate irresponsibility. Cambridge Journal of Economics