Strict Products Liability While driving under the influence of alcohol, Joe runs off the road and wrecks his car. As the car turns over, the protruding door latch hits the ground and the door flies...

Puce has two individual shareholders, Abram and Carmella. The shareholders purchased their stock in Puce four years ago at a cost of $500,000 each. For the past nine years, Puce has been engaged in...

Brennen sold a machine used in his business for $180,000. The machine was purchased eight years ago for $340,000. Depreciation up to the date of the sale for regular income tax purposes was $210,000...

Suppose that any punitive damages awarded to the plaintiff were to be paid, not to the plaintiff, but rather to, say, a charity designated by the plaintiff. How might plaintiffs incentives to seek...

The Greenwich Bank & Trust Co. (GB&T) opened in 1998 and by 2008 had expanded to a total of four branches in the Greenwich, Connecticut, community of 62,000 residents. A competitor using the name...

In 2015, Tom and Missy form TM Partnership, Ltd. (an LLLP), to own and operate certain real estate. Tom contributed land, and Missy contributed cash to be used for setting up the entity and creating...

Suppose an entrepreneur is considering buying an existing business or franchise. Which of the eight entrepreneurial traits would most likely apply to this person, and why?

Blanche Creek has engaged your firm because she has been charged with failure to file her 2013 federal Form 1040. Blanche maintains that the reasonable cause exception should apply. During the entire...

On January of the current year, Becky (20%), Chuck (30%), and Dawn (50%) are partners in the BCD Partnership. During the current year, BCD reports the following results. All items occur evenly...

Suppose that the court concludes that the statute applies only to skiing and does not apply to snow tubing. Will Alainas lawsuit be successful? Explain. Alaina Sweeney went to Ragged Mountain Ski...

A large manufacturing business has hired you as a fraud detection specialist. The first day on the job your boss asks you the following questions: 1. What is Benfords Law? 2. In what situations is it...

On December 21, 1988, Pan Am Flight 103 exploded 31,000 feet in the air over Lockerbie, Scotland, killing all 259 passengers and crew on board and 11 people on the ground. Among those killed was...

Gerald is an entrepreneur who likes to be actively involved in his business ventures. He is going to invest $500,000 in a business that he projects will produce a tax loss of approximately $125,000...

Libretto Corporation owns a national chain of retail music stores. The corporation wants to expand into a new, extremely competitive, and highly specialized businessthe composition and production of...

Fiscus, age 23, entered into an oral contract with Badger, a 30-year-old bricklayer, for the construction of a backyard barbecue for a fee of $ 300. The work was completed in two weeks, as agreed. a....

On November 15, I. Sellit, a manufacturer of crystalware, mailed to Benny Buyer a letter stating that Sellit would sell to Buyer one hundred crystal A goblets at $100 per goblet and that the offer...

Read the article entitled Following Benfords Law, or Looking Out for No. 1 found at www.rexswain. com/benford.html. The article mentions that a statistics professor can easily discern if students...

Northeastern Pharmaceutical and Chemical Company (NEPACCO) had a manufacturing plant in Verona, Missouri, that produced various hazardous and toxic by-products. The company pumped the by-products...

Mitsubishi Motors North America, Inc., operates an auto plant in Normal, Illinois. In 2003, TNT Logistics Corp. coordinated deliveries of auto parts to the plant, and DeKeyser Express, Inc.,...

Platinum, Inc., has determined its taxable income as $215,000 before considering the results of its capital gain or loss transactions. Platinum has a short-term capital loss of $24,000, a long-term...

The Venganza Tribe is a federally recognized Indian tribal government described in I. R. C. 7701(a)(40)(A). The Venganza Tribe would like to invest some of its cash resulting from its newly opened...

Walter Van Houten and John King formed 1545 Ocean Avenue, LLC, with each managing 50 percent of the business. Its purpose was to renovate an existing building and construct a new commercial building....

Allie forms Broadbill Corporation by transferring land (basis of $125,000, fair market value of $775,000), which is subject to a mortgage of $375,000. One month prior to incorporating Broadbill,...

Erwick Construction Company contracted to build a house for Charles. The specifications called for the use of Karlene Pipe for all plumbing. Erwick, however, got a better price on Boynton Pipe and...

For which of Bartons purchases (the surround-sound system, the kayak, the 4-Runner, and the six iMacs) would the creditor need to file a financing statement to perfect its security interest? Paul...

Marriott Resorts had a formal company party for more than 200 employees. At one point during the party, they aired a videotape that compiled employees and their spouses comments about a household...

Chloe and Emma start a new business, Cement Sidewalks and Accessories (CSA), during the current year. CSA is organized as a partnership. Chloe owns 40% of CSA; Emma owns the remaining 60%. Chloe and...

Penguin LLP owns a rental property and operates a consulting business. Each partner is active in the business and receives compensation from the LLP. The LLP invests its excess cash in government and...

Emily Patrick (36 Paradise Road, Northampton, MA 01060) formed Teal Corpo ration a number of years ago with an investment of $200,000 of cash, for which she received $20,000 in stock and $180,000 in...

American Brass manufactured and sold brass and copper products, primarily in coil form. This manufacturing process generated a considerable amount of waste in the form of dust that American Brass...

Ken Ward was an Illinois farmer who worked land owned by his father-in-law, Frank Ruda. To finance his operation, he frequently borrowed money from Watseka First National Bank, paying back the loans...

Larry has severe vision problems and, in the past, he has claimed the additional standard deduction available to blind taxpayers. This year Larrys doctor prescribed a new type of contact lens that...

Carol Garcia and Pedro Salgado were bus drivers for Latino Express, Inc., a transportation company. Garcia and Salgado began soliciting signatures from other drivers to certify the Teamsters Local...

Mills Electric Co. signed a contract with S&S Horticulture Architects, a two person landscaping partnership operated by Sullivan and Smyth, to maintain the grounds and flowers at the Mills Electric...

Eagle Partners meets all of the requirements of 1237 (subdivided realty). In 2014, Eagle Partners begins selling lots and sells four separate lots to four different purchasers. Eagle Partners also...

The Masonic nursing home has mostly female occupants and hires fewer male attendants than female ones. Home administrators maintain that the female occupants (for privacy reasons) would not consent...

Phil, a cash-basis taxpayer, sells the following marketable securities, which are capital assets during 2015. Determine whether the gains or losses are long-term or short-term. Also determine the net...

Diane and Ed have equal capital and profits interests in the DE Partnership, and they share the economic risk of loss from recourse liabilities according to their partnership interests. In addition,...

Jonathan writes to Willa, stating Ill pay you $150 if you reseed my lawn. Willa reseeds Jonathans lawn as requested. Has a contract been formed? If so, what kind?

Ready Foods contracts to buy two hundred carloads of frozen pizzas from Speedy Distributors. Before Ready or Speedy starts performing, can the parties call off the deal? What if Speedy has already...

1. What is the definition of the crime of obtaining goods by false pretenses? Do the facts in this case satisfy that definition? Explain. 2. Besides the defendant, who may have committed a crime in...

Adventure Quest, Inc., a nonprofit school, was founded and operated by Peter Drutchal, its executive director and only full-time employee. From 1994 to 1996, Adventure Quest had liability coverage...

In the current year, Paul Chaing (4522 Fargo Street, Geneva, IL 60134) acquires a qualifying historic structure for $350,000 (excluding the cost of the land) and plans to substantially rehabilitate...

George and Linda are divorced and own a house from the marriage. Under the divorce decree, Linda pays George $ 5,000 per month alimony. Because the real estate market has collapsed in the area where...

Respond to the following independent situations: a. Jacob is a single taxpayer who has net investment income consisting of $10,000 interest on a certificate of deposit, $5,000 from dividends from a...

An agreement that is blatantly and substantially anticompetitive is deemed a per se violation of Section 1 of the Sherman Act. Under what rule is an agreement analyzed if it appears to be...

Bob, who works as a credit manager for a large bank, has a reputation for being a very hard worker. His convenient downtown apartment is located near the bank, which allows him to work undisturbed...

1. Why did the court conclude that an unoccupied house did not necessarily create a substantial increase in hazard? 2. Why did the court hold that Allstates cancellation of the policy, retroactive to...

Evgenia is a resident of California. She recently purchased two computers from an online retailer that did not charge California sales tax. The retailer happened to be offering a steep discount if...

Andrea is an employee of Fern Corporation. She also has her own business working as a life coach. For 2015, Andrea's wages from Fern were $210,000. Her self-employment income was $30,000. a. Compute...

If Shuebkes review was conducted in good faith and conformed to generally accepted accounting principles, could Superior hold Shuebke Delgado liable for negligently failing to detect material...

Mike Lyons incorporated Lyons Concrete, Inc., in Montana, but did not file its first annual report, so the state involuntarily dissolved the firm in 1996. Unaware of the dissolution, Lyons continued...

5. The state of Alaska was a tenant in a large office building owned by Univentures, a partnership. The state made a lease payment of $28,143.47 to Univentures with state treasury warrant No....

Paul Gett is a well-known, wealthy financial expert living in the city of Torris. Adam Wade, Getts friend, tells Timothy Brown that he is Getts agent for the purchase of rare coins. Wade even shows...

The chapter identifies nine factors that led to the "perfect fraud storm." Explain how these factors helped create and foster the ethical compromises that occurred between 2000 and 2002.

George Chaney and William Dickerson were partners in Bowens Mill Landing, which purchased a large piece of land in the 1980s. The partners had planned to develop the property, but nothing was ever...

Sheila sells land to Elane, her sister, for the fair market value of $40,000. Six months later when the land is worth $45,000, Elane gives it to Jacob, her son. (No gift tax resulted.) Shortly...

William H. Sullivan, Jr., purchased all the voting shares of the New England Patriots Football Club, Inc. (the Old Patriots). He organized a new corporation called the New Patriots Football Club,...

Just prior to a major operation, Cody gives his son, Martin, stock in Robin Corporation (fair market value of $500,000 and basis of $700,000). At the time of the gift, Cody held some unused capital...

Company N will receive $100,000 of taxable revenue from a client. Compute the NPV of the $100,000 in each of the following cases. a. Company N will receive $50,000 now (year 0) and $50,000 in year 1....

Mike and Linda have three dependent children who are full-time students in 2015. Mike and Lindas taxable income is $180,000 and they provided $8,000 of support for each child. Information for each...

While driving her car in Colorado, Callie Norset, a resident of Alabama, negligently struck Jake Nguyen, a resident of Arizona. As a result of the accident, Nguyen suffered more than $22,000 in...

In problem 89 of Chapter 9, you were asked to determine the initial basis of Emelio and Charitas business, investment, and personal use assets. In this problem, you are to determine the adjusted...

At the beginning of 2015, Ms. P purchased a 20 percent interest in PPY Partnership for $20,000. Ms. Ps Schedule K-1 reported that her share of PPYs debt at year-end was $12,000 and her share of...

Fiona, a regional sales manager, works from her office in State U. Her region includes several states, as indicated in the sales report below. Fiona is compensated through straight commissions on the...

1. What facts could you change that may sway the courts judgment in analyzing personal jurisdiction over Pilatus in this case? 2. Does this decision mean that Weingeroff is without any legal recourse...

In a 1031 like-kind exchange, Rafael exchanges equipment that originally cost $200,000. On the date of the exchange, the equipment given up has an adjusted basis of $85,000 and a fair market value...

WMI Corporation was initially financed primarily by loans from Wells Fargo. Early on, the company got into deep financial difficulties, and needed to obtain additional loans to continue operations....

During the year, Inez recorded the following transactions involving capital assets. Gain on the sale of unimproved land (held as an investment for 3 years) ............ $ 3,000 Loss on the sale of a...

Plaintiff, a seller of milk, had for ten years bid on contracts to supply milk to defendant school district and had supplied milk to other school districts in the area. On June 15, plaintiff...

Lymon Mitchell operated a Badcock Home Furnishings dealership, under which as dealer he was paid a commission on sales and Badcock retained title to merchandise on display. Mitchell sold his...

(Multiple Choice) 1. Usually, for everyone involvedespecially victimsthe investigation of fraud is very: a. Pleasant and relaxing. b. Educational. c. Exciting. d. Traumatic and difficult. 2. To...

1. What should Preece have done after being informed by Schroer of her imminent sex change? 2. Were Preeces reasons for rescinding the job offer defendable or a pretext for discrimination? 3. Is...

Use a tax service to give three parallel citations for Falstone, Inc. v. Commissioner, a Ninth Circuit Court of Appeals case decided in 2003. Using only the headnote(s), determine the issue(s) in...

Jerome, Sheila, Gary, and Ella agreed to purchase a tract of land and make it available for use as a free playground for neighborhood children. They called the enterprise Meadowbrook Playground....

ETHICS: Koby, age 16, works after school at Fast- Food from 4 p.m. until 11 p.m. On Friday night, the restaurant manager sees that Koby is exhausted, but insists that he remain until 4:30 a.m.,...

Adia owns a house and has an elderly third cousin living with her. Adia decides she needs fire insurance on the house and a life insurance policy on her third cousin to cover funeral and other...

Carol is a single mother who owns a wholesale auto parts distributorship. The business is organized as a sole proprietorship. Her business has advanced, and she can no longer devote the time...

The Southland Corporation (Southland) owned the 7 Eleven trademark and licenses franchisees to operate convenience stores using this trademark. Each franchise is independently owned and operated. The...

Your client, Heron Corporation, has a deficit in accumulated E & P of $300,000. Starting this year, it expects to generate annual E & P of$150,000 for the next four years and would like to distribute...

What steps must the researcher take to ensure the reliability of a regulation?

1. You are meeting a friend for coffee at your local Barnes and Noble. This friend is skeptical about Christianity and the Bible. During the course of the conversation your friend says, "The Bible is...

What two elements must exist before a person can be held liable for a crime? Can a corporation commit crimes?

A power company began employing women as meter readers, and the job classification went from all-male to all-female within a few years. The labor union that represented bargaining-unit employees...

1. How did trust contribute to Mr. Armstrongs fraud? 2. In the chapter, lack of access to information was discussed as one of the factors that provide opportunities for fraud. If investors would have...

Katherine Apostoleres owned the rights to Dunkin Donuts franchises in Brandon and Temple Terrace, Florida. The franchisor offered all its franchisees the right to renew their existing franchise...

Fillon Corporation's operations include two manufacturing facilities, one in State A and one in State B. The plant located in A generated $200,000 of income, and the plant located in B generated a...

Recently, a politician was interviewed about fiscal policy, and she mentioned reducing the "tax gap." Explain what this term means. What are some of the pertinent political and economic issues...

ETHICS: The National Football League (NFL) owns the copyright to the broadcasts of its games. It licenses local television stations to telecast certain games and maintains a blackout rule, which...

On September 2, Deborah Jones signed a Storage Rental Agreement with Econo-Self Storage owned by Ernie Hanna. Jones needed to store her personal belongings and furniture because of the flooding of...

In a merger under state law, Anchor Corporation acquires all the assets of Tower Corporation. Towers assets have a $5 million FMV and a $2.2 million adjusted basis. Assuming Tower liquidates, which...

(True and False) 1. Civil bankruptcy cases are usually investigated by the FBI and other law enforcement agencies. 2. A person acting as an officer in a bankruptcy case is prohibited from purchasing...

Assume that you are a CPA and a tax specialist. Your clients include Ale and Grains, Inc., an S corporation, and Gustav and Heidi Lager, a married couple who are shareholders and the operators of Ale...

Springs Corporation has developed a nature park at the site of Blue Springs. Because Newberry Corporation wants to develop several other springs in the area, Newberry wants to merge with Springs...

Without permission, Grissom entered onto land owned by another and then proceeded to cut and sell the timber from the land. On learning that the timber had been sold, the owner of the land brought an...

Roy Mercurio drove his Nissan Altima into a tree in the middle of the night at a speed of approximately thirty-five miles per hour. When the car struck the tree, the passenger compartment collapsed,...

Nina is the auditor for Geiger Construction, a local builder. Geiger recently renovated a historic building in downtown Kingston. The building, which consists of 5 shops, is owned by the Restoring...

Cerulean Corporation has two equal shareholders, Eloise and Olivia. Eloise acquired her Cerulean stock three years ago by transferring property worth $700,000, basis of $300,000, for 70 shares of the...

Kelly is single; her dependent child, Barbara, lives with her. After her divorce, Kelly was awarded permanent custody of Barbara and has not agreed to waive her right to claim Barbara as a dependent....

Lonnie Hippen moved to Long Island, Kansas, to work at an insurance company owned by Griffiths. After he moved there, Griffiths offered to sell Hippen a house he owned and Hippen agreed in writing to...