If APC takes an equity interest, the restaurant will need a new legal organizational form. What form would you recommend? Why? APC, Inc., is a venture capital firm that invests in new businesses to...

A friend notices that you are reading the Internal Revenue Code of 1986. Your friend inquires why you are consulting a 1986 publication, especially when tax laws change so frequently. What is your...

Geographic Expeditions, Inc. (GeoEx), which guided climbs up Mount Kilimanjaro, required climbers to sign a release to participate in an expedition. The form mandated the arbitration of any dispute...

The client, Mrs. Tatum, purchased a new microwave oven from Inki Appliances Company. No written or oral warranty was given when the sale was made. The microwave stopped working one week after Mrs....

Think about the following questions from the point of view of violation of public policy or breach of a covenant of good faith and fair dealing, and see what the outcome would be. a. An employee was...

Kweisi incurs the following employment-related expenses during the year: Airfare ...... $2,000 Lodging ..... 1,500 Meals ...... 1,200 Entertainment ... 800 Incidentals ..... 500 His employer...

Anna, age 65, who lives with her unmarried son, Mario, received $7,000, which was used for her support during the year. The sources of support were as follows: Social Security benefits ..$1,500 Mario...

At-Risk Loss Limitation. The KC Partnership is a general partnership that manufactures widgets. The partnership uses a calendar year as its tax year and has two equal partners, Kerry and City...

Beach Corporation, an accrual basis taxpayer, reports the following results for the current year: a. What is Beachs taxable income? b. What is Beachs current E&P? Inc ome Gross profit from...

Adrian rents a bicycle from Barbara. The bicycle rental contract Adrian signed provides that Barbara is not liable for any injury to the renter caused by any defect in the bicycle or the negligence...

Fern Schimkes husband, Norbert, was obligated on two promissory notes in favor of Union National Bank. Some time prior to his death, Union National Bank prepared a guaranty contract that was given to...

David Dental, DDS, and his unmarried partner, Sally Surgeon, MD, have lived together for the past five years. Both are at the peak of their careers and decide to buy a new show case home in La Jolla,...

Ronald Sadler, a California resident, owned a helicopter distribution company in West Germany, Delta Avia. This company distributed U.S.-made Hughes civilian helicopters in western Europe. Sadlers...

When a movement was organized to build Charles City College, Hauser and others signed pledges to contribute to the college. At the time of signing, Hauser inquired what would happen if he should die...

(Multiple choice) 1. Which of the following results in the highest loss per case? a. Expense tampering. b. Payroll schemes. c. Register disbursement schemes. d. Billing schemes. 2. Which of the...

Thomas Rinks and Joseph Shields developed Psycho Chihuahua, a caricature of a Chihuahua dog with a do-not-back-down attitude. They promoted and marketed the character through their company, Wrench,...

Pink Corporation has several employees. Their names and salaries are listed below. Judy ................. $470,000 Holly (Judys daughter) .......... 100,000 Terry (Judys son) ............. 100,000...

Santiago and Amy are married and file a joint tax return claiming their three children, ages 12, 14, and 18, as dependents. Their AGI is $140,000. Determine the amount of the couple's child tax...

Avery purchased a refrigerator from a retail store. The written contract stated that the refrigerator was sold as is and that the warranty of merchantability and all warranties of fitness were...

1. Does the LLP shield protect Snyders personal assets from negligence committed by other partners? 2. Should Snyder have been more active in being aware of his partners deeds? Did he have a duty to...

Iris Corporation owns 30% of Fresia Corporation's stock. On November 15, Fresia Corporation, with current E & P of $320,000, distributes land (fair market value of $100,000; basis of $160,000) to...

Anne and Michael own and operate a successful mattress business. They have decided to take the business public. They contribute all the assets of the business to newly formed Spring Corporation each...

In year 0, Javens, Inc. sold machinery with a fair market value of $400,000 to Chris. The machinery's original basis was $317,000 and Javens's accumulated depreciation on the machinery was $50,000,...

Waldo makes out a negotiable promissory note payable to the order of Grace. Grace indorses the note by writing on it Without recourse, Grace and transfers the note for value to Adam. Adam,in need of...

Brian Felley went to the home of Tom and Cheryl Singleton on June 8 to look at a used car that the Singletons had advertised for sale in the local paper. The car was a 1991 Ford with 126,000 miles on...

Lam entered into contracts with Dallas Semiconductor to build six machines, referred to in its contracts as Tools A-F. The contracts were entered into in 2000 and in 2001, but Maxim Integrated...

Scrap metal is a big business in Tennessee, and most of the scrap metal is shipped out of state. Tennessee was concerned that much of the metal being sold to dealers in the state was stolen, so the...

Corporation VBs tax returns for 2012, 2013, and 2014 provide the following information: a. On the basis of the above data, did VB derive any tax benefit from its 2012 NOL? Explain your conclusions....

In the current year Clay reports income and losses from the following activities: Activity X ..$28,000 Activity Y ..(10,000) Activity Z ..(20,000) Salary 100,000 Activities X, Y, and Z are all...

Arkin, the owner of Redacre, executed a real estate mortgage to the Shawnee Bank and Trust Company for $10,000. After the mortgage was executed and recorded, Arkin constructed a dwelling on the...

While Butler and his wife, Wanda, were browsing through Sloans used car lot, Butler told Sloan that he was looking for a safe but cheap family car. Sloan said, That old Cadillac hearse aint hurt at...

1. What did the contract between Herring and the Bowmans require Herring to do? What is the significance of these provisions? 2. On the issue of liability, in whose favor did the court rule? Why? 3....

New Orleans Paddlewheels, Inc. (NOP), is a Louisiana corporation formed in 1982 when James Smith, Sr., and Warren Reuther were its only shareholders, with each holding 50 percent of the stock.NOP is...

Elmore purchased a car from Doenges Brothers Ford. The car had been placed with the dealership by a dealership employee as part of a consignment arrangement. Elmore was unable to obtain title to the...

Nellie Lumpkin, who suffered from various illnesses, including dementia, was admitted to the Picayune Convalescent Center, a nursing home. Because of Lumpkins mental condition, her daughter, Beverly...

1. Was Midlands condemnation of property in this case for a public benefit? Explain. 2. Is it fair that a city can exercise its eminent domain power to take property even though the property will not...

Roy Newburn borrowed money and bought a $49,000 truck from Treadwell Ford. A few months later, the truck developed transmission problems. Newburn learned that the truck had 170,000 more miles on it...

Six years ago, Donna purchased land as an investment. The land cost $150,000 and is now worth $480,000. Donna plans to transfer the land to Development Corporation, which will subdivide it and sell...

Mary Dale worked in the law office of Emory Stone, an attorney practicing securities law. While proofreading Marys keying of a document relating to the merger of two computer software companies,...

(a) Judy orally promises her daughter, Liza, that she will give her a tract of land for her home. Liza, as intended by Judy, gives up her homestead and takes possession of the land. Liza lives there...

A manufacturing company has the following items related to AMT: Alternative minimum taxable base $98,502,900 Regular tax 11,202,098 Foreign AMT tax credit . 1,400,000 Negative ACE adjustment from a...

Shelly Zumaya (2220 East Hennepin Avenue, Minneapolis, MN 55413) is the president and sole shareholder of Kiwi Corporation (stock basis of $400,000). Incorporated in 2004, Kiwi Corporation's sole...

Basic, Inc., was a publicly traded company engaged in the business of manufacturing chemical refractories for the steel industry. Beginning in September, Combustion Engineering, Inc., and Basic began...

Paul Strich did business as an optician in Duluth, Minnesota. Paul used only the products of the Plymouth Optical Co., a national manufacturer of optical products and supplies with numerous retail...

Owl, Inc., was owned entirely by Jeri Bell and Jerry Gore, each owning 620,000 of the 1,240,000 shares of common stock outstanding. On January 1, 2015, Owl established an employee stock ownership...

James D. Merritt leased a storage locker from Nationwide Warehouse Co., Ltd. (Nationwide), and agreed to pay a monthly fee to lease the locker. Merritt placed various items in the leased premises but...

BDD Partnership is a service-oriented partnership that has three equal general partners. One of them, Barry, sells his interest to another partner, Dale, for $90,000 cash and the assumption of Barrys...

Multiple Choice Questions Betty, a salesperson, is an employee with $52,000 AGI who maintains a home office for the convenience of her employer, Smart Systems. The office takes up 5% of Betty's home...

A contract made for the sale of a farm stated that the buyers deposit would be returned if for any reason the farm cannot be sold. The seller later stated that she had changed her mind and would not...

Dodona I, LLC, invested $ 4 million in two securities offerings from Goldman, Sachs & Co. The investments were in collat-eralized debt obligations ( CDOs). Their value depended on residential...

Sherwood negligently ran into the rear of Austens car, which was stopped at a stoplight. As a result, Austen received bodily injuries and her car was damaged. Sherwood, arts editor for the...

A1 Roofing Co. entered into a written contract with Jaffe to put a new roof on the latters residence for $1,800, using a specified type of roofing, and to complete the job without unreasonable delay....

For the following independent situations, determine the optimum filing status for the years in question. a. Wayne and Celia had been married for 24 years before Wayne died in an accident in 2013....

Suppose that the supply schedule of Brazilian Coffee beans is as follows: Price of Brazilian Coffee beans (per pound) Quantity of Brazilian Coffee beans supplied (pounds) $4.00 6,000 $3.50 5,000...

Three general unsecured creditors are owed $45,000 as follows: A, $15,000; B, $5,000; and C, $25,000. After all other creditors were paid, the amount left for distribution to general unsecured...

A statute requires all vessels traveling on the Great Lakes to provide lifeboats. One of Winston Steamship Companys boats is sent out of port without a lifeboat. Perry, a sailor, falls overboard in a...

Mohammad Omar Aly Hassan and nine others were indicted in a federal district court on charges of conspiring to advance violent jihad (holy war against enemies of Islam) and other offenses related to...

Facebook, Inc., launched a program called Bea-con that automatically updated the profiles of users on Facebooks social networking site when those users had any activity on Beacon partner sites. For...

Dr. Bryan Cook is a licensed dentist who fitted and made a set of dentures for Mrs. Iris Downing, a patient of Dr. Cook who was fitted for dentures. After Mrs. Downing received her dentures from Dr....

Multiple Choice Questions 1. Mindy, an individual, owns 100% of Markee, an S corporation, and she has an initial stock basis of $10,000. This is the first year of Markee's operations. Additional...

After the fall of the Soviet Union, the new government of Azerbaijan began converting certain state- controlled industries to private ownership. Ownership in these companies could be purchased...

Alvin Cagle was a potato farmer in Alabama who had had several business dealings with the H.C. Schmieding Produce Co. (Schmieding). Sev-eral months before harvest, Cagle entered into an oral sales...

American Bank loaned Koplik $50,000 to buy equipment for a restaurant about to be opened by Casual Citchen Corp. The loan was not repaid, and Fast Foods, Inc., bought out the interest of Casual...

Virginia Partners, Ltd. (Virginia Partners), a limited partnership organized under the laws of Florida, conducted business in Kentucky but failed to register as a foreign limited partnership, as...

Beth retires when she turns 65. She begins receiving a monthly pension of $300 from her employers qualified retirement plan. While employed, Beth contributed $13,000 to the plan. a. Beth uses the...

Mario owns 2,000 shares of Nevada Corporation common stock at the beginning of the year. His basis for the stock is $38,880. During the year, Nevada declares and pays a stock dividend. After the...

A disc jockey named Z-Trip made a remix of a Beastie Boys song with the hip-hop group's permission. Monster Energy (ME), an energy drink company, wanted to use the remix as part of a video promotion....

Joseph and Erica, husband and wife, jointly own all of the stock in Velvet Corporation. The two are currently involved in divorce proceedings, and pursuant to those negotiations, they have agreed...

In April 2006, a DC-9 aircraft landed in the port city of Ciudad del Carmen, located 500 miles east of Mexico City. When the planes crew began directing security personnel away from the plane, the...

Maria Garcia is a CPA whose firm has prepared the tax returns of Stanley Corporation for many years. A review of Stanleys last three tax returns by a new staff accountant, who has been assigned to...

Methamphetamine (meth) is an addictive, synthetic drug made chiefly in small toxic labs (STLs) in homes, tents, barns, or hotel rooms. The manufacturing process is dangerous, often resulting in...

Milt, a self-employed attorney, incurs the following expenses in the current year: Dues paid to the local chamber of commerce .. $1,000 Business lunches for clients and prospective clients (Milt does...

Simmons, Hoffman, and Murray were partners doing business under the firm name of Simmons & Co. The firm borrowed money from a bank and gave the bank the firms note for the loan. In addition, each...

Tony and Susan are starting a retail business selling formal wear for men and women. They estimate profits and losses for the next five years to be: ($20,000), ($10,000), ($5,000), $10,000, and...

Sandra Lerner and Patricia Holmes were friends. One evening, while applying nail polish to Lerner, Holmes layered a raspberry color over black to produce a new color, which Lerner liked. Later, the...

Roy Rand executed and delivered the following note to Sue Sims: Chicago, Illinois, June 1, 2011; I promise to pay to Sue Sims or bearer, on or before July 1, 2011, the sum of $7,000. This note is...

This year, Mesa Inc.s before-tax income was $9,877,000. It paid $419,000 income tax to Minnesota and $385,000 income tax to Illinois. a. Compute Mesas federal income tax. b. What is Mesas tax rate on...

John and Georgia are a married couple with two dependent sons. Their salaries total $130,000. They have a capital loss of $8,000 and tax-exempt interest income of $1,000. They paid home mortgage...

In what ways do bankruptcy laws benefit the economy as a whole? The economic crisis that started in late 2007 led to a significant increase in bankruptcy filings by U.S. consumers and businesses. In...

Construction Helicopters paid Heli-Dyne Systems $315,000 for three helicopters that were in Argentina. Two were ready to fly, and one was disassembled for routine maintenance. The contract said...

Martin transfers real estate with an adjusted basis of $260,000 and fair market value of $350,000 to a newly formed corporation in exchange for 100% of the stock. The corporation assumes the...

Wozniacki and Wilcox form Jewel LLC, with each receiving a one-half interest in the capital and profits of the LLC. Wozniacki receives his one-half interest as compensation for tax planning services...

On May 1, Jennings, a car dealer, e-mails Wheeler and says, "I have a 1955 Thunderbird convertible in mint condition that I will sell you for $13,500 at any time before June 9. [Signed] Peter...

Medtrans, an ambulance company, was unable to pay its bills. In need of cash, it signed an engagement letter with Deloitte & Touche to perform an audit that could be used to attract investors....

State which court(s) have jurisdiction as to each of these lawsuits: (a) Pat wants to sue his next-door neighbor Dorothy, claiming that Dorothy promised to sell him the house next door. (b) Paula,...

Syrovy and Alpine Resources, Inc., entered into a Timber Purchase Agreement. Syrovy agreed to sell and Alpine agreed to buy all of the timber produced during a two-year period. The timber to be sold,...

Frances Hector entered Cedars- Sinai Medical Center (Cedars- Sinai), Los Angeles, California, for a surgical operation on her heart. During the operation, a pacemaker was installed in Hector. The...

Michael Kittell was employed at Vermont Weatherboard. While operating a saw at the plant, Kittell was seriously injured when a splinter flew into his eye and penetrated his head. Kittell sued Vermont...

Nancy and her daughter, Kathleen, have been working together in a cattery called "The Perfect Cat." Nancy formed the business in 1999 as a sole proprietorship, and it has been very successful. Assets...

Hassad owns a rental house on Lake Tahoe. He uses a real estate firm to screen prospective renters, but he makes the final decision on all rentals. He also is responsible for setting the weekly...

Broadbill Corporation, a calendar year C corporation, has two unrelated cash method shareholders: Marcia owns 51% of the stock, and Zack owns the remaining 49%. Each shareholder is employed by the...

Theresa is a college professor who wants to work for a consulting firm during the summer. She will be working on special projects relating to professional development programs. What advantages might...

Complete the chart for each of the following independent distributions. Assume that all distributions are nonliquidating and pro rata to the partners, that no contributed property was distributed,...

William E. Story agreed to pay his nephew, William E. Story II, a large sum of money (roughly equivalent to $50,000 in 2007 dollars) if he would refrain from drinking liquor, using tobacco, swearing,...

On July 11, 1984, Jose Padilla was working as a vacation-relief route salesperson for Frito-Lay. He testified that he made a route stop at Sals Beverage Shop, where he was told by Mrs. Ramos that she...

On September 24, 2007, Miguel Carcamo was going through his mail. For some reason, Miguel had not yet received his bank statement, which he usually received at the beginning of each month. Although...

Mountain Stream Trout Co. agreed to buy market size trout from trout grower Lake Farms, LLC. Their five- year contract did not define market size. At the time, in the trade, market size referred to...

Brian Felley went to the home of Thomas and Cheryl Singleton to look at a used car that the Singletons had offered for sale. The car, a six-year-old Ford Taurus, had approximately 126,000 miles on...

Umair sold some equipment he used in his business on August 29, 2016, that was originally purchased for $70,000 on November 21, 2015. The equipment was depreciated using the 7-year MACRS method for a...

Green was the owner of a large department store. On Wednesday, January 26, he talked to Smith and said, I will hire you as sales manager in my store for one year at a salary of $48,000; you are to...