SOLUTION MANUAL FOR
Management Information Systems Managing the Digital Firm,
17th edition Kenneth C. Laudon, Jane P. Laudon
Chapter 1-15
Chapter 1
Information Systems in Global Business Today
Sure! I’ll expand on the topics related to "Taxation of Business Entities," providing a more detailed exploration. This overview will cover
fundamental concepts, applications, and implications relevant to the study of business taxation.---### Overview of Business Entities#### 1.
Types of Business EntitiesBusiness entities can be categorized based on ownership structure and tax treatment. Understanding these types is
crucial for determining tax obligations and benefits.- **Sole Proprietorships**: - Owned by a single individual, this is the simplest form of
business entity. Income is reported on the owner’s personal tax return (Form 1040, Schedule C), which simplifies tax filing but also means
personal liability for debts and obligations.- **Partnerships**: - Consisting of two or more individuals, partnerships do not pay federal
income taxes. Instead, they are considered pass-through entities, meaning income is taxed at the partners' individual rates. Form 1065 is
used to report partnership income, while partners receive Schedule K-1 to report their share on their returns.- **Corporations**: -
Corporations are separate legal entities that provide limited liability protection to their owners (shareholders). C-Corporations face double
taxation: once at the corporate level on profits and again at the individual level when dividends are distributed. S-Corporations, on the other
hand, are pass-through entities but have restrictions on ownership and number of shareholders.- **Limited Liability Companies (LLCs)**:
- LLCs combine the flexibility of partnerships with the liability protection of corporations. An LLC can choose to be taxed as a sole
proprietorship, partnership, or corporation, allowing for strategic tax planning. ### 2. Tax Implications of Each Entity TypeUnderstanding
the tax implications of each entity type is critical for effective business planning.- **Sole Proprietorships**: - Income is taxed at the
owner’s individual tax rate. All profits and losses are reported on the owner’s tax return. This simplicity, however, can expose owners to
significant personal risk.- **Partnerships**: - Each partner reports their share of income and losses on their personal returns, allowing for
loss deductions. Partners are also subject to self-employment taxes on their share of the income, which can significantly impact tax
liability.- **Corporations**: - C-Corporations are taxed at the corporate tax rate (currently 21%). Dividends are taxed again at the
shareholder level. S-Corporations avoid double taxation, but there are restrictions on the number and type of shareholders.- **Limited
Liability Companies (LLCs)**: - By default, single-member LLCs are treated as sole proprietorships for tax purposes, while multi-member
LLCs are treated as partnerships. However, they can elect to be taxed as a corporation if beneficial.### Key Tax Concepts#### 1. Income
RecognitionIncome recognition is a fundamental principle in taxation, determining when income must be reported.- **Cash vs. Accrual
Accounting**: - Businesses can choose between cash and accrual methods. Cash accounting recognizes income when received and
expenses when paid, making it straightforward. Accrual accounting recognizes income when earned and expenses when incurred, aligning
revenue with the period it relates to, but can complicate cash flow management.#### 2. DeductionsDeductions reduce taxable income,
directly impacting tax liability.- **Ordinary and Necessary Expenses**: - The IRS allows deductions for expenses that are ordinary
(common in the industry) and necessary (helpful and appropriate for the business
Student Learning Objectives
1-1 How are information systems transforming business and why are they so essential
for running and managing a business today?
1-2 What is an information system? How does it work? What are its management,
organization, and technology components? Why are complementary assets
essential for ensuring that information systems provide genuine value for
organizations?
1-3 What academic disciplines are used to study information systems and how does
each contribute to an understanding of information systems?
1-4 How will MIS help my career?
Key Terms
1-1
,The following alphabetical list identifies the key terms discussed in this chapter. The
page number for each key term is provided.
Business functions, 17 Information technology (IT) infrastructure, 20
Business model, 12 Input, 15
Business processes, 10 Internet, 19
Complementary assets, 25 Intranets, 20
Computer hardware, 19 Knowledge workers, 17
Computer literacy, 16 Management information systems (MIS), 16
Computer software, 19 Middle management, 17
Culture, 18 Network, 19
Data, 14 Networking and telecommunications technology, 19
Data management technology, 19 Operational management, 17
Data workers, 17 Organizational and management capital, 25
Digital firm, 10 Output, 15
Extranets, 20 Processing, 15
Feedback, 15 Production or service workers, 17
1-2
,Information, 14 Senior management, 17
Information system, 14 Sociotechnical view, 27
Information systems literacy, 16 World Wide Web, 20
Information technology (IT), 14
! I’ll expand on the topics related to "Taxation of Business Entities," providing a more detailed exploration. This overview will cover fundamental concepts, applications, and implications relevant to the study of business
taxation.---### Overview of Business Entities#### 1. Types of Business EntitiesBusiness entities can be categorized based on ownership structure and tax treatment. Understanding these types is crucial for determining tax
obligations and benefits.- **Sole Proprietorships**: - Owned by a single individual, this is the simplest form of business entity. Income is reported on the owner’s personal tax return (Form 1040, Schedule C), which simplifies
tax filing but also means personal liability for debts and obligations.- **Partnerships**: - Consisting of two or more individuals, partnerships do not pay federal income taxes. Instead, they are considered pass-through
entities, meaning income is taxed at the partners' individual rates. Form 1065 is used to report partnership income, while partners receive Schedule K-1 to report their share on their returns.- **Corporations**: -
Corporations are separate legal entities that provide limited liability protection to their owners (shareholders). C-Corporations face double taxation: once at the corporate level on profits and again at the individual level when
dividends are distributed. S-Corporations, on the other hand, are pass-through entities but have restrictions on ownership and number of shareholders.- **Limited Liability Companies (LLCs)**: - LLCs combine the
flexibility of partnerships with the liability protection of corporations. An LLC can choose to be taxed as a sole proprietorship, partnership, or corporation, allowing for strategic tax planning. ### 2. Tax Implications of Each
Entity TypeUnderstanding the tax implications of each entity type is critical for effective business planning.- **Sole Proprietorships**: - Income is taxed at the owner’s individual tax rate. All profits and losses are reported on
the owner’s tax return. This simplicity, however, can expose owners to significant personal risk.- **Partnerships**: - Each partner reports their share of income and losses on their personal returns, allowing for loss
deductions. Partners are also subject to self-employment taxes on their share of the income, which can significantly impact tax liability.- **Corporations**: - C-Corporations are taxed at the corporate tax rate (currently
21%). Dividends are taxed again at the shareholder level. S-Corporations avoid double taxation, but there are restrictions on the number and type of shareholders.- **Limited Liability Companies (LLCs)**: - By default,
single-member LLCs are treated as sole proprietorships for tax purposes, while multi-member LLCs are treated as partnerships. However, they can elect to be taxed as a corporation if beneficial.### Key Tax Concepts#### 1.
Income RecognitionIncome recognition is a fundamental principle in taxation, determining
Teaching Suggestions
You are probably meeting in the first class session to introduce yourself, the course, and
to meet the students. It is good to get to the classroom early and meet the students as they
come in. Learn a few names as the students enter.
After going over requirements for the course, give an overview of the course stressing
this is not a technical course. Typically, you cannot do enough to put non-technical types
at ease.
The opening case, ―Smart Stores Reinvent the Retail Space,‖ shows students that even
the most successful businesses must continually embrace technology upgrades and
improvements as a way to enhance customer value and increase a business‘s competitive
advantage. Students will become familiar with the idea that different kinds of businesses
have had to change the way they operate.
Acrelec, a French digital signage company, is piloting technology to help retailers
manage store curbside pickups by customers placing orders online. Customers can use a
retailer‘s smartphone app to indicate they are coming to pick up an order, and the Acrelec
system will estimate when a customer will arrive at a particular store. Object-recognition
cameras identify exactly when a customer‘s car arrives and where it is parked. Acrelec is
especially useful for big-box retailers, grocery stores, and home-improvement stores.
Shelves have become more than just a surface for storing and displaying objects. New
systems for ―smart‖ shelves use proximity sensors, 3D cameras, microphones, RFID
readers, and weight sensors to enable interactions between shoppers in physical stores
and the shelves they are standing in front of. These systems can create a highly
personalized shopping experience that fundamentally improves the way shoppers move
inside physical stores.
Brands and retailers such as Pepsi, Walmart, and Albertsons are starting to use Smart
Shelf by AWM to replicate the benefits of the online experience in physical retail
environments. Using super-wide-angle low-light HD cameras, retailers deploying Smart
Shelf can view and track their products in real-time. The solution improves operational
efficiencies by highlighting specific shelves that need product stocking and allows for
real-time on-shelf marketing to consumers. When retailers connect Smart Shelf to their
mobile apps, they can help shoppers locate products themselves through their
1-3
, smartphones and tablets.
! I’ll expand on the topics related to "Taxation of Business Entities," providing a more detailed exploration. This overview will cover fundamental concepts, applications, and implications relevant to the study of
business taxation.---### Overview of Business Entities#### 1. Types of Business EntitiesBusiness entities can be categorized based on ownership structure and tax treatment. Understanding these types is crucial
for determining tax obligations and benefits.- **Sole Proprietorships**: - Owned by a single individual, this is the simplest form of business entity. Income is reported on the owner’s personal tax return (Form
1040, Schedule C), which simplifies tax filing but also means personal liability for debts and obligations.- **Partnerships**: - Consisting of two or more individuals, partnerships do not pay federal income
taxes. Instead, they are considered pass-through entities, meaning income is taxed at the partners' individual rates. Form 1065 is used to report partnership income, while partners receive Schedule K-1 to report
their share on their returns.- **Corporations**: - Corporations are separate legal entities that provide limited liability protection to their owners (shareholders). C-Corporations face double taxation: once at the
corporate level on profits and again at the individual level when dividends are distributed. S-Corporations, on the other hand, are pass-through entities but have restrictions on ownership and number of
shareholders.- **Limited Liability Companies (LLCs)**: - LLCs combine the flexibility of partnerships with the liability protection of corporations. An LLC can choose to be taxed as a sole proprietorship,
partnership, or corporation, allowing for strategic tax planning. ### 2. Tax Implications of Each Entity TypeUnderstanding the tax implications of each entity type is critical for effective business planning.-
**Sole Proprietorships**: - Income is taxed at the owner’s individual tax rate. All profits and losses are reported on the owner’s tax return. This simplicity, however, can expose owners to significant personal
risk.- **Partnerships**: - Each partner reports their share of income and losses on their personal returns, allowing for loss deductions. Partners are also subject to self-employment taxes on their share of the
income, which can significantly impact tax liability.- **Corporations**: - C-Corporations are taxed at the corporate tax rate (currently 21%). Dividends are taxed again at the shareholder level. S-Corporations
avoid double taxation, but there are restrictions on the number and type of shareholders.- **Limited Liability Companies (LLCs)**: - By default, single-member LLCs are treated as sole proprietorships for tax
purposes, while multi-member LLCs are treated as partnerships. However, they can elect to be taxed as a corporation if beneficial.### Key Tax Concepts#### 1. Income RecognitionIncome recognition is a
fundamental principle in taxation, determining
Section 1-1, “How are information systems transforming business and why are they so
essential for running and managing a business today?” gives students a feel for the
importance of information systems in business today and how they have
transformedbusinesses on the world stage. A good discussion of the six important business
objectives outlined in this section allows the instructor and students to discuss why businesses
have become so dependent on information systems today and the importance of these systems for
the survival of a firm. Stress to students that information systems are not a luxury. In most
businesses they are the core of survival. This would be a good time to ask students to discuss how
their own schools are using information systems to enhance their product offering.
Globalization is affecting virtually every country in the world. As technology becomes
more pervasive and, in some cases easier to use, globalization will continue its steady
march. In 2019, an estimated 30 percent of the world economy resulted from foreign
trade of goods and services, both imports and exports. Half of Fortune 500 US firms
obtain nearly 50 percent of their revenue from foreign operations. For instance, more than
50 percent of Intel‘s revenues in 2019 came from overseas sales of its microprocessors.
Ask students to provide examples of truly digital firms (Cisco Systems and GE) as
opposed to those businesses (local mom-and-pop stores or a local doctor‘s office) that
still perform many business processes outside of integrated information systems.
Review the six strategic business objectives: operational excellence; new products,
services, and business models; customer and supplier intimacy; improved decision
making; competitive advantage; and survival. The rest of the text will continually refer to
these six objectives as reasons why firms should incorporate and integrate business
processes with information systems.
! I’ll expand on the topics related to "Taxation of Business Entities," providing a more detailed exploration. This overview will cover fundamental concepts, applications, and implications relevant to the study of
business taxation.---### Overview of Business Entities#### 1. Types of Business EntitiesBusiness entities can be categorized based on ownership structure and tax treatment. Understanding these types is crucial for
determining tax obligations and benefits.- **Sole Proprietorships**: - Owned by a single individual, this is the simplest form of business entity. Income is reported on the owner’s personal tax return (Form 1040,
Schedule C), which simplifies tax filing but also means personal liability for debts and obligations.- **Partnerships**: - Consisting of two or more individuals, partnerships do not pay federal income taxes. Instead,
they are considered pass-through entities, meaning income is taxed at the partners' individual rates. Form 1065 is used to report partnership income, while partners receive Schedule K-1 to report their share on their
returns.- **Corporations**: - Corporations are separate legal entities that provide limited liability protection to their owners (shareholders). C-Corporations face double taxation: once at the corporate level on profits
and again at the individual level when dividends are distributed. S-Corporations, on the other hand, are pass-through entities but have restrictions on ownership and number of shareholders.- **Limited Liability
Companies (LLCs)**: - LLCs combine the flexibility of partnerships with the liability protection of corporations. An LLC can choose to be taxed as a sole proprietorship, partnership, or corporation, allowing for
strategic tax planning. ### 2. Tax Implications of Each Entity TypeUnderstanding the tax implications of each entity type is critical for effective business planning.- **Sole Proprietorships**: - Income is taxed at the
owner’s individual tax rate. All profits and losses are reported on the owner’s tax return. This simplicity, however, can expose owners to significant personal risk.- **Partnerships**: - Each partner reports their share
of income and losses on their personal returns, allowing for loss deductions. Partners are also subject to self-employment taxes on their share of the income, which can significantly impact tax liability.-
**Corporations**: - C-Corporations are taxed at the corporate tax rate (currently 21%). Dividends are taxed again at the shareholder level. S-Corporations avoid double taxation, but there are restrictions on the
number and type of shareholders.- **Limited Liability Companies (LLCs)**: - By default, single-member LLCs are treated as sole proprietorships for tax purposes, while multi-member LLCs are treated as
partnerships. However, they can elect to be taxed as a corporation if beneficial.### Key Tax Concepts#### 1. Income RecognitionIncome recognition is a fundamental principle in taxation, determining
Interactive Session: Organizations: Will the Coronavirus Pandemic Make Working
from Home the New Normal?
Case Study Questions
1. Define the problem described in this case. What are the management,
organization, and technology issues raised by this problem?
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