Question 1. “Stock Option Plans and The Issuance of Debt” Please respond to the following:
- Compare the two (2) main accounting issues associated with stock option plans. Make one (1) recommendation to FASB for overcoming obstacles in accounting for stock option plans. Provide one (1) specific example of the way in which your recommendation could improve the accounting for stock option plans.
- Suppose management is in need of large sums of cash to finance the construction of a new manufacturing plant and is considering issuing debt to obtain the cash. However, management is unsure of whether to issue convertible debt or debt issued with stock warrants. You are the senior accountant at your company, and management has asked for your help. Explain the similarities and differences between convertible debt and debt issued with stock warrants. Also, recommend to management the type of debt which it should issue. Provide a rationale for your recommendation. Question 2….”Dual-Residency Dilemma” Please respond to the following:
- A client solicits tax advice on homestead, vacation homes, and rental income in the preparation of their tax return. The client has a condo in Florida on the beach where they reside 7 months out of the year. A family home is maintained in Michigan although Florida is now considered home by the client. During the time the family is in Michigan the beach condo in Florida is rented. They are not sure how to proceed based on their rights under the law. Please explain the options they have and the necessary steps they will need to take in order to be compliant with the tax law. This question has a lot of different facets to it. What kind of things does the IRS look at to determine where someone’s home is? Is based upon how the taxpayer feels or upon particular facts and circumstances? I look forward to hearing your thoughts, this is definitely a scenario we do see in real life! These 2 questions for are separate classes, but are both accounting. Please respond to each question as a discussion board question.