(solution) ACC 331 Fall 2016 Writing Assignment Matt, a senior manager at

(solution) ACC 331 Fall 2016 Writing Assignment Matt, a senior manager at

I need help finding the tax solution to this tax writing assignment. I have attached the assignment.

ACC 331
Fall 2016
Writing Assignment Matt, a senior manager at the public accounting firm where you are employed, forwarded you an
e-mail from a client. Matt asks you to write a one to two page memo explaining the relevant tax
issues and providing advice to the client. Matt needs you to put the memo in the ACC 331 D2L
Dropbox (as a MS Word document or pdf file) before 5:00pm on Thursday, October 6, 2016.
Here is the e-mail: Dear Matt:
My partners and I are forming a new partnership, MTL Associates, which is an engineering
consulting firm. We will be open for business on January 1, 2017. MTL will bill clients for
services at the end of each month. MTL has a line of credit with a bank, and the bank requires us
to provide monthly financial statements prepared using the accrual method. I was wondering
what accounting method we need to use and/or should use for tax purposes? I?m hoping we can
use the same accounting method for book and tax purposes because I think it will make our
accounting easier.
We expect client billings will be about $50,000 each month. We expect to collect one-half of the
receivables within one month and the remaining receivables the following month. MTL?s
expenses are primarily for salaries and rent. Salaries will be paid on the last day of each month,
and rent will be paid on the first day of each month. My partners and I are all individual
taxpayers who have a 35 percent marginal tax rate. Thanks for your help with this.
Sincerely,
Greg Thompson
Partner
MTL Associates
PS Go Pack Go! Note: The assignment will be graded by the EY Communication Center (EYCC) to provide you
individualized professional feedback on your writing skills. Late assignments will not be
accepted. Plagiarism, copying, or other academic misconduct will result in a zero for this
assignment and may be reported to the Dean?s office.