Helen Thomas contracted to purchase a pool heater from Sunkissed Pools. As part of the $4,000 contract, Sunkissed agreed to install the pool heater, which was delivered to Thomass home and left in...

Lance H. and Wanda B. Dean are married and live at 431 Yucca Drive, Santa Fe, NM 87501. Lance works for the convention bureau of the local Chamber of Commerce, while Wanda is employed part-time as a...

Lauren Barton, a single mother with three children, lived in Portland, Oregon. Cynthia VanHorn also lived in Oregon until she moved to New York City to open and operate an art gallery. VanHorn asked...

Jack and Maggie Turton bought a house in Jefferson County, Idaho, located directly across the street from a gravel pit. A few years later, the county converted the pit to a landfill. The landfill...

Alice J. and Bruce M. Byrd are married taxpayers who file a joint return. Their Social Security numbers are 123-45-6789 and 111-11-1111, respectively. Alice's birthday is September 21, 1966, and...

For employment with the Firestorm Smokejumpersa crew of elite paratroopers who parachute into dangerous situations to fight firesapplicants must complete a series of tests. The crew chief sends the...

1. Calculate the 2010 and 2009 liquidity ratios identified using the Ratio Analysis table above. Also calculate the change and the percentage change for the ratios and complete the table. 2. Analyze...

To display desserts in restaurants, Mario Sclafani ordered refrigeration units from Felix Storch, Inc. Felix faxed a credit application to Sclafani. The application was faxed back with a signature...

Medtronic, Inc., is a medical technology company that competes for customers with St. Jude Medical S. C., Inc. James Hughes worked for Medtronic as a sales manager. His contract prohibited him from...

Rocky Mountain Races, Inc., sponsors the Pioneer Trail Ultramarathon with an advertised first prize of $ 10,000. The rules require the competitors to run 100 miles from the floor of Blackwater Canyon...

John Parsons (123-45-6781) and George Smith (123-45-6782) are 70% and 30% owners, respectively, of Premium, Inc. (11-1111111), a candy company located at 1005 16th Street, Cut and Shoot, TX 77303....

1. What are some of the fraud opportunities within Green Grass? 2. What symptoms of fraud exist, and what symptoms should the owner look for if he believes fraud may be occurring? 3. What steps...

Perform vertical and/or horizontal analysis of the statements and identify two things that appear to be unusual and could be possible symptoms of fraud. The balance sheet and income statement for ABC...

1. Describe the symptoms of fraud that might be evident to a fellow employee. 2. Recently, his employer has been putting more emphasis on controlling cost. With the slowing of overall technology...

Discuss whether either of the following contracts will be unenforceable on the ground that voluntary consent is lacking: (a) Simmons finds a stone in his pasture that he believes to be quartz....

Before buying a house, Dean and Donna Testa hired Ground Systems, Inc. (GSI), to inspect the sewage and water disposal system. GSI reported a split system with a watertight septic tank, a wastewater...

PEMS Co. International, Inc., agreed to find a buyer for Rupp Industries, Inc., for a com-mission of 2 percent of the purchase price, which was to be paid by the buyer. Using PEMSs services, an...

Tool Co. is a medium-sized company that buys copper rod and plastic materials to produce insulated copper wiring. Tool Co. operates out of a single building of about 500,000 square feet that includes...

Ewing was employed by Presto-X-Co., a pest exterminator. His contract of employment specified that he would not solicit or attempt to solicit customers of Presto-X for two years after the termination...

Gigi transfers real estate (basis of $60,000 and fair market value of $40,000) to Monarch Corporation in exchange for shares of 1244 stock. (Assume that the transfer qualifies under 351.) a. What...

Clever, Inc., is a car manufacturer. Its 2011 income statement is as follows: Clever, Inc. Income Statement For the Year Ended December 31, 2011 Sales revenue .......... $20,000 Less cost of goods...

The Insolvency Act 1986 gives the court the power to set aside trusts which are created in an attempt to elude personal bankruptcy or corporate insolvency. Similarly, the courts have refused to...

The following two comparative balance sheets and statements of income are for XYZ Company for the years 20x120x3: Income statement Calculate all ratios needed to determine if XYZ is possibly...

1. What clues caused Jane to suspect that fraud was involved? 2. Why is it important for fraud examiners to follow up on even the smallest inconsistencies? 3. In an attempt to identify possible...

1. What are the four requirements of a valid contract? 2. Did Duncan have a valid contract with Mitsui for employment as CDO? If so, was it a bilateral or a unilateral contract? 3. What are the...

James Durham runs an art gallery. He has several paintings from unknown artists that he has listed for sale. The paintings always sell at his weekly auction for $20,000 to $50,000 above what James...

The Enron Fraud Enron Corporation began as a small natural gas distributor and over the course of 15 years grew to become the seventh largest company in the United States. Soon after the federal...

Ryan Ross (111-11-1112), Oscar Omega (222-22-2222), Clark Carey (333-33-3333), and Kim Kardigan (444-44-4444) are equal active members in ROCK the Ages LLC. ROCK serves as agent and manager for...

1. Assume you are a financial analyst who works for a major brokerage company that is heavily invested in Bre-X Minerals. a. In what ways would investigating management and directors help determine...

Strike offers to sell Bailey one thousand shirts for a stated price. The offer declares that shipment will be made by the Dependable Truck Line. Bailey replies, I accept your offer for one thousand...

Maria Cardenas, a Latina woman, worked for Aramark as a housekeeper at McCormick Place convention center for over 20 years. It was a long-standing rule for employees that they could not remove any...

1. Did Beaver have the contractual capacity to enter into a contract with an exculpatory clause? Why or why not? 2. Assuming that Beaver did, in fact, sign the exculpatory clause, did she later...

While living in her home country of Tanzania, Sophia Kiwanuka signed an employment contract with Anne Margareth Bakilana, a Tanzanian living in Washington, D. C. Kiwanuka traveled to the United...

Analyze each of the characteristics in considering the indicated test for dependency as a qualifying child or qualifying relative. In the last two columns, after each listed test (e.g. gross income),...

There once was a corporation from Nantucket, Its controls leaked like holes in a bucket. Smelling trouble with the buyer, And with the supplier, They determined to fix it or chuck it. This limerick...

Did Amstels bid meet the requirements of an offer? Explain. Shane Durbin wanted to have a recording studio custom-built in his home. He sent invitations to a number of local contractors to submit...

1. Could Tony be right? Are employees defrauding the company, or has the Russian Roulette finally bit the bullet? 2. What possible fraud activities are associated with declining cash flows? Mikos...

Judy Olsen, Kristy Johnston, and their mother, Joyce Johnston, owned seventy- eight acres of real property on Eagle Creek in Meagher County, Montana. When Joyce died, she left her interest in the...

How would the Metzgars attorney likely have served process (the summons and complaint) on Playskool, Inc.? Ronald Metzgar placed his fifteen-month-old son, Matthew, awake and healthy, in his playpen....

Adam transfers property with an adjusted basis of $50,000 (fair market value of $400,000) to Swift Corporation for 90% of the stock. The property is subject to a liability of $60,000, which Swift...

Dean Brothers Corp. owns and operates a steel drum manufacturing plant. Lowell Wyden, the plant superintendent, hired Best Security Patrol, Inc. (BSP), a security company, to guard Dean Property and...

Suppose that the court determines that the parties did not reach an agreement. Further suppose that Amstel, in anticipation of building Durbins studio, had purchased materials and refused other jobs...

Large frauds can often be detected by performing financial statement analysis. Although such analysis can raise areas of concern, not all red flags are the result of fraudulent activities. Reasonable...

1. The fraud triangle consists of perceived pressure, perceived opportunity, and rationalization. How do you think John Rigas rationalized his dishonest use of company assets? 2. What are other ways...

Margrethe and Charles Pyeatte, a married couple, agreed that she would work so that he could go to law school and that when he finished, she would go back to school for her masters degree. After...

Professor Wise is teaching a summer seminar in business torts at State University. Several times during the course, he makes copies of relevant sections from business law texts and distributes them...

Hasbro used to manufacture a toy called Wonder World Aquarium. The toy included a powder that, when mixed with water, formed a gel that filled a plastic aquarium. Children could then place plastic...

How could this fraud have been prevented? Why is this a difficult fraud to prevent? May 13, 1988, a Friday incidentally, will be remembered by a major Chicago bank. Embezzlers nearly escaped with $69...

1. Would a court be likely to decide that the transaction between Holcomb and CCG was covered by the Uniform Commercial Code (UCC)? Why or why not? 2. Would a court be likely to consider Holcomb a...

1. What might be some other deterrents to ethical behavior in the business context, besides those discussed in this Focus on Ethics feature? 2. Can you think of a situation in which a business firm...

Just Homes, LLC (JH), hired Mike Building & Contracting, Inc., to do $1.35 million worth of renovation work on three homes. Community Preservation Corporation (CPC) supervised Mikes work on behalf of...

1. Compare the first-digit frequency in the transactions in this table below with Benfords Law. What are the results? 2. Could fraud be occurring in thisorganization? AMOUNT DESCRIPTION CHECK NO...

Identify the type of fraud being committed and explain your reasons. In 1997, Bill Eaves worked in the purchasing department of Mavis County. In 2000, Eaves was promoted to assistant county...

Baker and others entered a Wal-Mart store shortly after 3:00 A.M. by cutting through the metal door with an acetylene torch. They had moved some of the merchandise in the store to the rear door, but...

Dennis Jones, an old college friend, contacted you last week. Dennis owns several car washes, and he believes that financial statement fraud may be occurring. (He pays each car wash manager a bonus...

1. Should ICANNs actions be judged under the rule of reason or be deemed a per se violation of Section 1 of the Sherman Act? 2. Should ICANNs action be viewed as a horizontal or a vertical restraint...

Dorothy Drury suffered from dementia and chronic confusion. When she became unable to manage her own affairs, including decisions about medical and financial matters, her son Eddie arranged for her...

On July 27, 2000, Sheldorado Aluminum Products, Inc., installed an aluminum awning on the back of Marie Villettes home for use as a carport. On January 11, 2001, the awning collapsed on top of Ms....

In 2001, Puerto Rico enacted a law that requires specific labels on cement sold in Puerto Rico and imposes fines for any violations of these requirements. The law prohibits the sale or distribution...

Aron, a college student, signs a one-year lease agreement that runs from September 1 to August 31. The lease agreement specifies that the lease cannot be assigned without the landlords consent. In...

Using the financial information in the following tables, compute the required ratios list on the ratio analysis sheet and then complete the horizontal and vertical analyses worksheets. Income...

A check drawn by David for $500 is made payable to the order of Matthew and issued to Matthew. Matthew owes his landlord $500 in rent and transfers the check to his landlord with the following...

Why is a thorough knowledge of sources of tax law so important for a professional person who works in the tax area?

Ellie and Linda are equal owners in Otter Enterprises, a calendar year business. During the current year, Otter Enterprises has $320,000 of gross income and $210,000 of operating expenses. In...

Based on the case data, comment on the following issues as they relate to possible fraud: 1. Dereks firm selling Derek to the client as an SAP expert though he hadnt even seen the software before 2....

Tom and Gail form Owl Corporation with the following consideration: The installment note has a face amount of $350,000 and was acquired last year from the sale of land held for investment purposes...

Franco owns a 60% interest in the Dulera LLC. On December 31 of the current tax year, his basis in the LLC interest is $128,000. The fair market value of the interest is $140,000. In a proportionate...

High-Tech Collieries borrowed money from Holland. High-Tech later refused to be bound by the loan contract, claiming the contract was not binding because it had been obtained by duress. The evidence...

Joyce, a widow lives in an apartment with her two minor children (ages 8 and 10) whom she supports. Joyce earns $33,000 during 2014. She uses the standard deduction. a. Calculate the amount, if any,...

Phoebe and Parker are equal members of Phoenix Investors LLC. They are real estate investors who formed the entity several years ago with equal cash contributions. Phoenix then purchased a parcel of...

1. How is an opportunity created to commit appraisal fraud? Does the appraiser act alone, or is collusion routinely involved? 2. How is appraisal fraud detected? Is intent to deceive easy to prove in...

Beth R. Jordan lives at 2322 Skyview Road, Mesa, AZ 85201. She is a tax accountant with Mesa Manufacturing Company, 1203 Western Avenue, Mesa, AZ 85201 (employer identification number 11-1111111)....

(a) Ann owed $2,500 to Barry for services Barry rendered to Ann. The debt was due June 30, 2010. In March 2011, the debt was still unpaid. Barry was in urgent need of ready cash and told Ann that if...

One day, while Bruno is preparing for a difficult stunt, he gets into an argument with the director and refuses to perform any stunts at all. Can X Entertainment seek specific performance of the...

Kim Panenka asked to borrow $ 4,750 from her sister, Kris, to make a mortgage payment. Kris deposited a check for that amount into Kims bank account. Hours later, Kim asked to borrow another $ 1,100....

1. Suppose that Sun Farms supplies the basil that survived the storm but the basil does not pass the chemical-residue inspection. Which concept discussed in the chapter might allow Vals to refuse to...

While snowboarding down a slope at Mammoth Mountain Ski Area (Mammoth), 17-year-old David Graham was engaged in a snowball fight with his 14-year-old brother. As he was preparing to throw a snowball...

Ken Jones, the number-one-ranked prizefighter in his weight class, signed a two-year contract with Howard Stayword. The contract obligated Stayword to represent and promote Jones in all business and...

Marie and Ethan form Roundtree Corporation with the transfer of the following. Marie performs personal services for the corporation with a fair market value of $80,000 in exchange for 400 shares of...

Willis Music Co. advertised a television set at $22.50 in the Sunday newspaper. Ehrlich ordered a set, but the company refused to deliver it on the grounds that the price in the newspaper ad was a...

Michael Manin, an airline pilot, was twice convicted of disorderly conduct, a minor misdemeanor. To renew his flight certification with the National Transportation Safety Board (NTSB), Manin filed an...

Ralph Dewey has been charged with a violation of the Electronic Espionage Act, a federal statute that prohibits the transfer, by computer or disk or other electronic means, of a companys proprietary...

Galen Stoller was killed at a railroad crossing when an AMTRAK train hit his car. The crossing was marked with a stop sign and a railroad-crossing symbol, but there were no flashing lights. Galens...

Sarahs house caught on fire. Through the prompt assistance of her neighbor Odessa, the fire was quickly extinguished. In gratitude, Sarah promised to pay Odessa $1,000. Can Odessa enforce this...

Bath Iron Works (BIW) offered a job to Thomas Devine, contingent on Devines passing a drug test. The testing was conducted by NorDx, a subcontractor of Roche Biomedical Laboratories. When NorDx found...

The following situations are similar, but each represents a variation of a particular crime. Identify the crime and point out the differences in the variations. 1. Chen, posing fraudulently as...

Interpret each of the following citations. a. 14 T.C. 74 (1950). b. 592 F.2d 1251 (CA5, 1979). c. 951 USTC { 50,104 (CA6, 1995). d. 75 AFTR 2d 95110 (CA6, 1995). e. 223 F.Supp. 663 (W.D. Tex., 1963).

You are a new summer intern working for a major professional services firm. During your lunch break each day, you and a fellow intern, Bob, eat at a local sandwich shop. One day, Bobs girlfriend...

The Home Shopping Club ordered 12,000 Care Bear lamps from Ohio International, Ltd. When the lamps arrived, they had poor painting and staining, elements were improperly glued and could come loose (a...

Thomas McGrath was a partner in the law firm Tarbenson, Thatcher, McGrath, Treadwell & Schoonmaker. One day, at approximately 4:30 p. m., McGrath went to a restaurant cocktail establishment in...

For 20 years, Arts Flower Shop relied almost exclusively on advertising in the yellow pages to bring business to its shop in a small West Virginia town. One year, the yellow pages printer...

Dr. Kevin Bardwell owns Northfield Urgent Care, LLC, a Minnesota medical clinic. Northfield ordered flu vaccine from Clint Pharmaceuticals, a licensed distributer of flu vaccine located in Tennessee....

Some people believe that the audit industry has fallen out of touch with the realities of business. They believe that accounting standards were developed for a manufacturing environment and are not...

The New Rochelle Humane Society made a contract with the city of New Rochelle to capture and impound all dogs running at large. Spiegler, a minor, was bitten by some dogs while in her schoolyard. She...

What ALR annotation discusses 42 U.S.C.A. 740?

Brandy Austin used powdered infant formula to feed her infant daughter shortly after her birth. Austin claimed that a can of Nestl Good Start Supreme Powder Infant Formula was contaminated with...

Does the act of state doctrine bar Robco from seeking to enforce the contract? Explain. Robco, Inc., was a Florida arms dealer. The armed forces of Honduras contracted to purchase weapons from Robco...

Morgan (age 45) is single and provides more than 50% of the support of Rosalyn (a family friend), Flo (a niece, age 18), and Jerold (a nephew, age 18). Both Rosalyn and Flo live with Morgan, but...

James owns a three-story building. He leases the ground floor to Juans Mexican restaurant. The lease is to run for a five-year period and contains an express covenant of quiet enjoyment. One year...

1. Name at least three mistakes that Sherman made in interviewing Lee and Jackson. 2. The chapter identifies some of the characteristics of a good interview. In what ways could Sherman have changed...