5-2 Final Project Milestone Two: Income Taxes and Pensions

III.Income Taxes

1. If Congress voted to eliminatecorporate taxes, what would be the effect on your company's income statement and balance sheet? Defend your response.


2. Calculate the income tax rate for your chosen company. What effect will anincrease in incomeof $2,000,000 have on your company?


3. What are theeffectson the balance sheet and income statement? Justify your response.


4. How much did your company pay inforeign taxeslast year? What percentage of its income is United States vs. foreign?

V.Pensions
Address the following elements in the form of a memo to your CEO:

1. From your company's financial information, what type ofpension plandoes it have? Discuss the reasons why your company has chosen this particular plan.


2. What was theeffectof the pension plan on your company's financial statements? Defend your response.


3. Your CEO has informed you—the controller of your company—that the board of directors has made the decision to look atother optionsof types of retirement plans. Investigate what other alternatives would be available, and determine which would be appropriate for your particular company.

ACC 620 Milestone Two Guidelines and Rubric Prompt: In the first milestone, you addressed stockholders’ equity and income measurement/revenue recognition for your portfolio. In the second milestone for your final project, you will continue work on your portfolio by completing critical elements III and V. You will be addressing income taxes and pensions. III. Income Taxes A. If Congress voted to eliminate corporate taxes, what would be the effect on your company’s income statement and balance sheet? Defend your response. B. Calculate the income tax rate for your chosen company. What effect will an increase in income of $2,000,000 have on your company? C. What are the effects on the balance sheet and income statement? Justify your response. D. How much did your company pay in foreign taxes last year? What percentage of its income is United States vs. foreign? V. Pensions Address the following elements in the form of a memo to your CEO: A. From your company’s financial information, what type of pension plan does it have? Discuss the reasons why your company has chosen this particular plan. B. What was the effect of the pension plan on your company’s financial statements? Defend your response. C. Your CEO has informed you—the controller of your company—that the board of directors has made the decision to look at other options of types of retirement plans. Investigate what other alternatives would be available, and determine which would be appropriate for your particular company. Guidelines for Submission: Your paper must be submitted as a 2–4-page Microsoft Word document with double spacing, 12-point Times New Roman font, one- inch margins, and at least three sources cited in APA format. Critical Element Exemplary Proficient Needs Improvement Not Evident Value Income Taxes: Corporate Taxes Meets “Proficient” criteria, and defense is well supported with quantitative evidence (100%) Accurately describes the effect on the company’s income statement and balance sheet if Congress voted to eliminate corporate taxes, and defends response (90%) Describes the effect on the company’s income statement and balance sheet if Congress voted to eliminate corporate taxes, but does not defend response, description contains inaccuracies, or defense is illogical (70%) Does not describe the effect on the company’s income statement and balance sheet (0%) 13 Income Taxes: Increase in Income Meets “Proficient” criteria, and determination is well supported with quantitative evidence (100%) Accurately calculates the income tax rate for the company and determines the effect an increase in income would have on the company (90%) Calculates the income tax rate for the company and determines the effect an increase in income would have on the company, but calculation or determination contains inaccuracies (70%) Does not calculate the income tax rate for the company (0%) 14 Income Taxes: Effects Meets “Proficient” criteria, and justification is well supported with quantitative evidence (100%) Accurately determines the effects on the balance sheet and income statement and justifies response (90%) Determines the effects on the balance sheet and income statement, but determination contains inaccuracies, does not justify determination, or justification is illogical (70%) Does not determine the effects on the balance sheet and income statement (0%) 13 Income Taxes: Foreign Taxes Accurately determines how much the company paid in foreign taxes last year and what percentage of its income was United States versus foreign (100%) Determines how much the company paid in foreign taxes last year and what percentage of its income was United States versus foreign, but determination contains inaccuracies (70%) Does not determine how much the company paid in foreign taxes last year (0%) 13 Pensions: Pension Plan Meets “Proficient” criteria and shows a nuanced understanding of the company’s decision-making rationale (100%) Discusses the type of pension plan the company has and the reasons why the company has chosen that plan (90%) Discusses the type of pension plan the company has, but does not discuss the reasons why the company chose that plan (70%) Does not identify the type of pension plan the company has (0%) 14 Pensions: Effect Meets “Proficient” criteria, and defense is well supported with concrete examples (100%) Accurately determines the effect of the pension plan on the company’s financial statements and defends response (90%) Determines the effect of the pension plan on the company’s financial statements, but determination lacks accuracy, does not defend determination, or defense is weak or illogical (70%) Does not determine the effect of the pension plan on the company’s financial statements (0%) 13 Pensions: Other Options Meets “Proficient” criteria and is well supported with concrete examples (100%) Evaluates other types of retirement plans available and determines which would be appropriate for the company (90%) Evaluates other types of retirement plans available, but does not determine which would be appropriate for the company (70%) Does not evaluate other types of retirement plans available (0%) 13 Articulation of Response Submission is free of errors related to citations, grammar, spelling, syntax, and organization and is presented in a professional and easy-to- read format (100%) Submission has no major errors related to citations, grammar, spelling, syntax, or organization (90%) Submission has major errors related to citations, grammar, spelling, syntax, or organization that negatively impact readability and articulation of main ideas (70%) Submission has critical errors related to citations, grammar, spelling, syntax, or organization that prevent understanding of ideas (0%) 7 Total 100%