Organizations today have grown manifold. Companies have grown tremendously, where operating them as a single unit is herculean task. Hence it is advisable to divide an organization into various departments based on the functions they perform for effective management and functioning. Departmentalization enables division of work and each department shall have a manager responsible for that particular departmental function. To determine: Reason for division of departments in an organization

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Answer 1

Question

Chapter 24, Problem 1DQ

To determine

Concept Introduction:

Organizations today have grown manifold. Companies have grown tremendously, where operating them as a single unit is herculean task. Hence it is advisable to divide an organization into various departments based on the functions they perform for effective management and functioning.

Departmentalization enables division of work and each department shall have a manager responsible for that particular departmental function.

To determine: Reason for division of departments in an organization

Expert Solution & Answer

Explanation of Solution

Following are the advantages of departmentalization:

• There is scope for specialization when a manager is engaged in a particular functional department. He would equip and excel in that functional area.

• When an organization is divided into departments, the administration process becomes easy. Each department can be given an objective or goal. Any deviation from the objective can be easily noticed in various departments.

• Each function is divided between the departments based on their nature. Each department manager will be held responsible for the functioning of their departments.

• The top management can easily communicate with the department heads and effectively convey their goals and take their suggestions in the decision-making process.

Division of departments ensures division of work. Every worker is instilled with the sense of process/job ownership. Also departmentalization promotes cross functioning and communication effective as no single department can work on its own without coordinating with others. Thus it ensures transparency and efficacy.

Thus the reason for division of departments in companies is explained.

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JH, Inc., is a calendar year, accrual basis corporation with Joe as its sole shareholder (basis in his stock is $90,000). On January 1 of the current year, JH Corporation has accumulated E & P of $200,000. Before considering the effect of the distribution described below, the corporation’s current E & P is $50,000. On November 1, JH distributes an office building to Joe. The office building has an adjusted basis of $80,000 (fair market value of $100,000) and is subject to a mortgage of $110,000. Assume that the building has been depreciated using the ADS method for both income tax and E & P purposes. What are the tax consequences of the distribution to JH and to Joe? (In your answer, be sure to describe the effects on taxable income for both JH and Joe, the impact of the distribution on JH’s E & P, and Joe’s basis in the building.)

Joe is the sole shareholder of JH Corporation. Joe sold his stock to Ethan on October 31 for $150,000. Joe’s basis in JH stock was $50,000 at the start of the year. JH distributed land to Joe immediately before the sale. JH’s basis in the land was $20,000 (fair market value of $25,000). On December 31, Ethan received a $75,000 cash distribution from JH. During the year, JH has $20,000 of current E & P and its accumulated E & P balance on January 1 is $10,000. Which of the following statements is true? a. Joe recognizes a $110,000 gain on the sale of his stock. b. Joe recognizes a $100,000 gain on the sale of his stock. c. Ethan receives $5,000 of dividend income.d. Joe receives $20,000 of dividend income. e. None of the above.

Answer 2

Question

Chapter 24, Problem 1DQ

To determine

Concept Introduction:

Organizations today have grown manifold. Companies have grown tremendously, where operating them as a single unit is herculean task. Hence it is advisable to divide an organization into various departments based on the functions they perform for effective management and functioning.

Departmentalization enables division of work and each department shall have a manager responsible for that particular departmental function.

To determine: Reason for division of departments in an organization

Expert Solution & Answer

Explanation of Solution

Following are the advantages of departmentalization:

• There is scope for specialization when a manager is engaged in a particular functional department. He would equip and excel in that functional area.

• When an organization is divided into departments, the administration process becomes easy. Each department can be given an objective or goal. Any deviation from the objective can be easily noticed in various departments.

• Each function is divided between the departments based on their nature. Each department manager will be held responsible for the functioning of their departments.

• The top management can easily communicate with the department heads and effectively convey their goals and take their suggestions in the decision-making process.

Division of departments ensures division of work. Every worker is instilled with the sense of process/job ownership. Also departmentalization promotes cross functioning and communication effective as no single department can work on its own without coordinating with others. Thus it ensures transparency and efficacy.

Thus the reason for division of departments in companies is explained.

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Answer 3

Question

Chapter 24, Problem 1DQ

To determine

Concept Introduction:

Organizations today have grown manifold. Companies have grown tremendously, where operating them as a single unit is herculean task. Hence it is advisable to divide an organization into various departments based on the functions they perform for effective management and functioning.

Departmentalization enables division of work and each department shall have a manager responsible for that particular departmental function.

To determine: Reason for division of departments in an organization

Expert Solution & Answer

Explanation of Solution

Following are the advantages of departmentalization:

• There is scope for specialization when a manager is engaged in a particular functional department. He would equip and excel in that functional area.

• When an organization is divided into departments, the administration process becomes easy. Each department can be given an objective or goal. Any deviation from the objective can be easily noticed in various departments.

• Each function is divided between the departments based on their nature. Each department manager will be held responsible for the functioning of their departments.

• The top management can easily communicate with the department heads and effectively convey their goals and take their suggestions in the decision-making process.

Division of departments ensures division of work. Every worker is instilled with the sense of process/job ownership. Also departmentalization promotes cross functioning and communication effective as no single department can work on its own without coordinating with others. Thus it ensures transparency and efficacy.

Thus the reason for division of departments in companies is explained.

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Answer 4

Question

Chapter 24, Problem 1DQ

To determine

Concept Introduction:

Organizations today have grown manifold. Companies have grown tremendously, where operating them as a single unit is herculean task. Hence it is advisable to divide an organization into various departments based on the functions they perform for effective management and functioning.

Departmentalization enables division of work and each department shall have a manager responsible for that particular departmental function.

To determine: Reason for division of departments in an organization

Expert Solution & Answer

Explanation of Solution

Following are the advantages of departmentalization:

• There is scope for specialization when a manager is engaged in a particular functional department. He would equip and excel in that functional area.

• When an organization is divided into departments, the administration process becomes easy. Each department can be given an objective or goal. Any deviation from the objective can be easily noticed in various departments.

• Each function is divided between the departments based on their nature. Each department manager will be held responsible for the functioning of their departments.

• The top management can easily communicate with the department heads and effectively convey their goals and take their suggestions in the decision-making process.

Division of departments ensures division of work. Every worker is instilled with the sense of process/job ownership. Also departmentalization promotes cross functioning and communication effective as no single department can work on its own without coordinating with others. Thus it ensures transparency and efficacy.

Thus the reason for division of departments in companies is explained.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 24, Problem 1DQ

To determine

Concept Introduction:

Organizations today have grown manifold. Companies have grown tremendously, where operating them as a single unit is herculean task. Hence it is advisable to divide an organization into various departments based on the functions they perform for effective management and functioning.

Departmentalization enables division of work and each department shall have a manager responsible for that particular departmental function.

To determine: Reason for division of departments in an organization

Expert Solution & Answer

Explanation of Solution

Following are the advantages of departmentalization:

• There is scope for specialization when a manager is engaged in a particular functional department. He would equip and excel in that functional area.

• When an organization is divided into departments, the administration process becomes easy. Each department can be given an objective or goal. Any deviation from the objective can be easily noticed in various departments.

• Each function is divided between the departments based on their nature. Each department manager will be held responsible for the functioning of their departments.

• The top management can easily communicate with the department heads and effectively convey their goals and take their suggestions in the decision-making process.

Division of departments ensures division of work. Every worker is instilled with the sense of process/job ownership. Also departmentalization promotes cross functioning and communication effective as no single department can work on its own without coordinating with others. Thus it ensures transparency and efficacy.

Thus the reason for division of departments in companies is explained.

Answer 6

Chapter 24, Problem 1DQ

To determine

Concept Introduction:

Organizations today have grown manifold. Companies have grown tremendously, where operating them as a single unit is herculean task. Hence it is advisable to divide an organization into various departments based on the functions they perform for effective management and functioning.

Departmentalization enables division of work and each department shall have a manager responsible for that particular departmental function.

To determine: Reason for division of departments in an organization

Expert Solution & Answer

Explanation of Solution

Following are the advantages of departmentalization:

• There is scope for specialization when a manager is engaged in a particular functional department. He would equip and excel in that functional area.

• When an organization is divided into departments, the administration process becomes easy. Each department can be given an objective or goal. Any deviation from the objective can be easily noticed in various departments.

• Each function is divided between the departments based on their nature. Each department manager will be held responsible for the functioning of their departments.

• The top management can easily communicate with the department heads and effectively convey their goals and take their suggestions in the decision-making process.

Division of departments ensures division of work. Every worker is instilled with the sense of process/job ownership. Also departmentalization promotes cross functioning and communication effective as no single department can work on its own without coordinating with others. Thus it ensures transparency and efficacy.

Thus the reason for division of departments in companies is explained.

Answer 7

Chapter 24, Problem 1DQ

To determine

Concept Introduction:

Organizations today have grown manifold. Companies have grown tremendously, where operating them as a single unit is herculean task. Hence it is advisable to divide an organization into various departments based on the functions they perform for effective management and functioning.

Departmentalization enables division of work and each department shall have a manager responsible for that particular departmental function.

To determine: Reason for division of departments in an organization

Answer 8

Expert Solution & Answer

Explanation of Solution

Following are the advantages of departmentalization:

• There is scope for specialization when a manager is engaged in a particular functional department. He would equip and excel in that functional area.

• When an organization is divided into departments, the administration process becomes easy. Each department can be given an objective or goal. Any deviation from the objective can be easily noticed in various departments.

• Each function is divided between the departments based on their nature. Each department manager will be held responsible for the functioning of their departments.

• The top management can easily communicate with the department heads and effectively convey their goals and take their suggestions in the decision-making process.

Division of departments ensures division of work. Every worker is instilled with the sense of process/job ownership. Also departmentalization promotes cross functioning and communication effective as no single department can work on its own without coordinating with others. Thus it ensures transparency and efficacy.

Thus the reason for division of departments in companies is explained.