Accounting

Due Week 10 and worth 320 pointsAs the representative from your accounting firm or practice, you are in charge of stock market analysisthat will be presented to clients as part of professional consultation process. One of your high-profileclients is trying to determine the possible investment potential between two companies. However, beforeyou can recommend investments to clients, you need to familiarize yourself with the background of thecompanies, analyze stock trends, research current events, and analyze financial statements. Select one(1) pair of these companies and conduct your analysis.Pepsi versus Coca Cola, orAmazon versus eBayWrite an eight to ten (8-10) page paper in which you:1. Analyze history, product / services, major customers, major suppliers, andleadership and provide a synopsis of each company.2. Based on the stock price for the timeline listed below, present a graph that illustrates the stockprice of each company. Indicate conclusions that can be drawn based on the trend:a. The day of its initial public offeringb. January 1, 2013c. January 1, 2012d. January 1, 20113. Research and summarize at least two (2) news events (this may include mergers, acquisitions, orpolitical issues) that occurred from 2012 to the present day and the potential impact on the stockprice of each company. Indicate how this influences your investment decision related to thecompany.4. Provide an overall financial analysis for each company that highlights the key characteristics forinvestment and how this may impact an investor s decision.5. Based on your review of the financial data for each company, indicate the accuracy and reliabilityof the data for making investment decision. Provide support for your conclusion.6. Recommend which company you consider as the better investment for your client and how youwill present your recommendation. Support your recommendation with data from your analysis.7. Use at least four (4) quality academic resources in this assignment. Note: Wikipedia and otherWebsites do not quality as academic resources.Your assignment must follow these formatting requirements:Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on allsides; citations and references must follow APA or school-specific format. Check with yourprofessor for any additional instructions.name, the course title, and the date. The cover page and the reference page are not included inthe required assignment page length.The specific course learning outcomes associated with this assignment are:Analyze the accounting for corporation requirements related to stock valuation, dividends, andretained earnings.Determine how to value investments and how to report them based on that valuation.Use technology and information resources to research issues in financial accounting.Write clearly and concisely about financial accounting using proper writing mechanicsThis paper is basically calculations…you must calculate the break even point etc. The paper should be at least 250 words.Allie forms Broadbill Corporation by transferring land (basis of $125,000, fair market value of $775,000), which is subject to a mortgage of $375,000. One month prior to incorporating Btroadbill, Allie borrows $100,000 for personal reasons and gives the lender a second mortgage on the land. Broadbill Corporation issues stock worth $300,000 to Allie and assumes the mortgages on the land.a.   What are the tax consequences to Allie and to Broadbill Corporation?b.   How would the tax consequences to Allie differ if she had not borrowed the $100,000?Red Corporation wants to set up a manufacturing facility in a Midwestern state. After considerable negotiations with a small town in Ohio, Red accepts the following offer: land (fair market value of $3 million) and cash of $1 million.a.   How much gain or income, if any, must Red Corporation recognize?b.   What basis will Red Corporation have in the land?c.   Within one year of the contribution, Red constructs a building for $800,000 and purchases inventory for $200,000. What basis will Red Corporation have in each of those assets?Sam, a single taxpayer, acquired stock in a corporation that qualified as a small business corporation under x1244 at a cost of $100,000 three years ago. He sells the stock for $10,000 in the current tax year.a.   How will the loss be treated for tax purposes?b.   Assume instead that Sam sold the stock to his sister, Kara, a few months after it was acquired for $100,000 (its fair market value). If Kara sells the stock for $60,000 in the current year, how should she treat the loss for tax purposes?Frank, Cora, and Mitch are equal shareholders in Purple Corporation. The corporation’s assets have a tax basis of $50,000 and a fair market value of $600,000. In the current year, Frank and Cora each loan Purple Corporation $150,000. The notes to Frank and Cora bear interest of 8% per annum. Mitch leases equipment to Purple Corporation for an annual rental of $12,000. Discuss whether the shareholder loans from Frank and Cora might be reclassified as equity. Consider in your discussion whether Purple Corporation has an acceptable debt-equity ratio.

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