Essay Title: 

Jim`s Music Company

March 18, 2016 | Author: | Posted in labor studies, social sciences

Jim ‘s Music Company

Making a purchase at the end of the year for the new goods and immediately selling them in lieu of the old stocks will help avoid the rising tax and cost of goods sold expenses . Taking this trend in perspective , it will not be long until additional expenses and higher taxes will evidently eat up the rising profits that the company is currently enjoying . Declaring and getting rid of the last s will help categorize them in the same boat as the old stock , saving the company the [banner_entry_middle]

additional expenses that will definitely be incurred in the course of rising inflation

Such a practice may seem like cheating but the IRS has made provisions to allow companies who employ changes in their inventory practices on the 12th month of each year or December . From a normal view point it would seem like evading the expected taxes that should be settled but as stated , strategically handling the situation from a financial aspect is also needed . Besides , if such a practice were illegal in nature , then why would the IRS allow such practices in the first place

The company will still be obliged to settle their dues and taxes , but at a different level . The expected declaration will be accounted for by referring towards the old stock with their current applicable tax rates and presiding lower book value to avail of the lower taxes that are due from them . There is not much unethical practice that can be seen , unless it comes to a point that a company is declaring a LIFO system but are still disposing of the old stocks first rather than the expected new ones which should be carrying higher costs with them

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