Tom works for ZYX Company and is suspected of embezzling funds from the company. By searching databases on the Internet, talking with his ex-wife, and searching through his trash, you gather the...

Sue is a customer account representative for ABC Company. She recently acquired several new accounts when a previous representative, Dan, took an early retirement. Sue reviewed each of Dans accounts...

Larry is a professional gambler, specializing in dog racing. He spends 50 to 60 hours per week studying racing forms and placing bets at the track. During the current year, Larry has winnings of...

Continental Enterprises, Inc. (Continental), had 2,510,000 shares of stock issued and outstanding. Louis E. Wolfson and members of his immediate family and associates owned in excess of 40 percent of...

At the beginning of the year, Poplock began a calendar-year dog boarding business called Griff's Palace. Poplock bought and placed in service the following assets during the year: Asset Date Acquired...

Rubio recently invested $20,000 (tax basis) in purchasing a limited partnership interest. His at-risk amount is $15,000. In addition, Rubio's share of the limited partnership loss for the year is...

Multiple Choice 1. Colorado passes a hotel tax of 8 percent for Colorado residents and 15 percent for out-of-state visitors. The new law A. Is valid, based on the Supremacy Clause B. Is void, based...

First Union Bank of Florida loaned money to Dale and Lynn Rix for their purchase of Anns Hallmark, a Florida corporation. First Union took a security interest in the stores equipment, fixtures, and...

Explain in words when efficiency requires severe punishments with low probability, and when efficiency requires mild punishments with high probability.

Ms. Crabtree is given a one-year, nontenured contract to teach English at Haddock State University, a public institution. After her contract year ends, she is not offered a contract for the next year...

Identify five distinct types of settings in which paralegals may be found.

Each of the following cases involves a taxable year of less than 12 months. In which situations is annualization required? a. A new corporation formed in September elects a calendar year. b. A...

On May 1, Melforth Realty Company offered to sell Greenacre to Dallas, Inc., for $1 million. The offer was made by telegraph and stated that the offer would expire on May 15. Dallas decided to...

Moore issues a negotiable promissory note payable to the order of Parish for the amount of $3,000. Parish raises the amount to $13,000 and negotiates it to Holton for $12,000. (a) If Holton is a...

Some scientific knowledge indicates that there is no safe level of exposure to a cancer-causing agent. In theory, even one molecule of such a substance has the potential for causing cancer. Section...

In admiralty law, there have to be rules for allocating ownership rights to property lost at sea. In the United States, the finder of an abandoned ship is generally awarded ownership, but in some...

Determine the total amount of tax due and the amount of the alternative minimum tax in each of the following situations: a. Wilbur Corporations regular tax liability is $180,000, and its tentative...

Multiply Choice 1. The president of R. Hoe & Co., Inc., refused to call a special meeting of the shareholders although 55 percent of them requested it. One purpose of the meeting was to demand that...

In July 2008, the Fuglebergs agreed to purchase from Triangle Ag 352.5 tons of urea fertilizer at a cost of $660 per ton and 135 tons of MES-15 fertilizer at a cost of $1,100 per ton. None of the...

Rosa contributes $50,000 to FlipCo in exchange for a 10% ownership interest. Rosa materially participates in FlipCo's business. FlipCo incurs a loss of $900,000 for 2014. Entity liabilities at the...

Many local jurisdictions apply a low property tax rate to land owned by privately operated golf courses. What is the economic justification for such a preferential rate?

Willie Waylon is a famous country-and-western singer. As an investment, Willie started a chain of barbecue restaurants called Willies Wonderful Ribs. Willies friends and associates invested $ 500,000...

Allied Shelving and Equipment, Inc., sells and installs shelving systems. National Deli, LLC, contracted with Allied to provide and install a parallel rack system (a series of large shelves) in...

Full-of-Nature is a vitamin supplement company in New York that makes different herbal pills for gaining muscular strength, losing weight, and living a healthier life. You have been hired to audit...

Under the Clean Air Act, the EPA can regulate gasoline additions if they "endanger the public welfare." Scientific evidence showed that lead emissions from gasoline constituted 90 percent of all the...

Donna suffered food poisoning at Skewers Restaurant, located inside Northside Mall. Northside exercised considerable control over all the tenants in the mall by regulating the hours of operation,...

During 2016, Lincoln Company hires seven individuals who are certified to be members of a qualifying targeted group. Each employee works in excess of 600 hours and is paid wages of $7,500 during the...

A requirement of substantial performance is good faith. Do you think that Jacob & Youngs substantially performed all of the terms of the contract in good faith? Why or why not?

Marsh has a prize horse named Arabian Knight. Marsh is in need of working capital. She borrows $50,000 from Mendez, who takes possession of Arabian Knight as security for the loan. No written...

From an ethical perspective, if LJL had been allowed to invoke the right-to-cure provision, could it have undone its wrongdoing so that the franchise relationship could have continued? Why or why...

1. If the guaranty agreement had not been in writing, would the agreement have been enforceable? Explain. 2. A guarantor can be required to pay a debt only after the principal debtor defaults. Which...

1. What might Stanley have meant when he said that by agreeing to go quietly, he provided a benefit to the company? 2. Stanley argued that he was not an insider because he was no longer employed by...

In 1996, the International Trade Administration of the U.S. Department of Commerce assessed antidumping duties against Koyo Seiko Co., NTN Corp., on certain tapered roller bearings and their...

Irma Rivera is a Hispanic woman who was born in Puerto Rico. She began working for Baccarat, Inc. (Baccarat), a distributor of fine crystal, as a sales representative in its retail store in...

As part of an integrated plan, Manchester Corporation creates Bedford Corporation as a wholly owned subsidiary. Then, Manchester acquires all of Bismarck Corporation by merging Bedford into Bismarck....

For 2016, Wilma has properly determined taxable income of $36,000, including $3,000 of unrecaptured 1250 gain and $8,200 of 0%/15%/20% gain. Wilma qualifies for head-of-household filing status....

Steven Gwin bought a lifetime Termite Protection Plan for his home from the local office of Allied-Bruce, a franchise of Terminix International Company. The plan provided that Allied-Bruce would...

In her will, Teressa granted a life estate to Amos in certain real estate, with remainder to Brenda and Clive in joint tenancy. All the residue of Teressas estate was left to Hillman College. While...

Sean McNamee was the owner of an accounting firm, W. F. McNamee & Co., LLC (WFM), which he founded and formed in Connecticut as a limited liability company (LLC). For federal tax purposes, an LLC can...

ABC Corporation is the object of a hostile takeover bid by XYZ Corporation. ABC incurs a total of $400,000 in attorneys fees, accounting fees, and printing costs for information mailed to ABC...

Buckley, an individual, began a business two years ago and has never sold a §1231 asset. Buckley owned each of the assets since he began the business. In the current year, Buckley sold the...

Rowe advertised in newspapers of wide circulation and otherwise made known that she would pay $5,000 for a complete set consisting of ten volumes of certain rare books. Ford, not knowing of the...

In 1999, Stephen and Linda Kailin bought the Monona Center, a mall in Madison, Wisconsin, from Perry Armstrong for $760,000. The contract provided, Seller represents to Buyer that as of the date of...

Retina Consultants, P.C., is a medical practice that specializes in retina eye surgery. This company hired Brendan Coleman as a software engineer in 2000. Prior to his hiring at Retina Consultants,...

Provide an example of a tax rule designed to motivate a socially desirable activity that also motivates transactions that reduce a taxpayers tax liabilities but serve no social purpose.

Barrett was injured when he struck a snowboard rail while he was skiing at a ski resort. He sued the resort for negligence for failure to warn of the presence of the snowboard rail. The resort owner...

Ballou Corporation distributes $200,000 in cash to its shareholders during the current year. Accumulated earnings and profits at the beginning of the year are $45,000, and current year earnings and...

Mason owns Brickman, Inc., which specializes in laying brick patios, terraces, and walkways. Mason bids on a contract with State University to build several large terraces as well as the walkways...

Burke has been a rancher all her life, raising cattle and crops. Her ranch is valued at $ 500,000, almost all of which is exempt under state law. Burke has eight creditors and a total indebtedness of...

At the time of his death on July 9, 2015, Aiden was involved in the following real estate. Fair Market Value (on July 9, 2015) Apartment building $2,100,000 Tree farm .. 1,500,000 Pastureland .....

Steve is considering the following transactions. Explain to him which actions will constitute gifts for gift tax purposes. a. Transferring all his ownership rights in a life insurance policy to...

The Penguin intentionally hits Batman with his umbrella. Batman, stunned by the blow, falls backwards, knocking Robin down. Robins leg is broken in the fall, and he cries out, Holy broken bat bones!...

Michelle Vinson was an employee of Meritor Savings Bank for approximately four years. Beginning as a teller-trainee, she ultimately advanced to the position of assistant branch manager. Her...

After Kira had had several drinks one night, she sold Charlotte a diamond necklace worth thousands of dollars for just $100.The next day, Kira offered the $100 to Charlotte and requested the return...

Napster,Inc., offered a service that allowed its users to browse digital music files on other users computers and download selections for free. Music industry principals filed a suit in a federal...

Alfonso Lopez, Jr., a 12th-grade student at Edison High School in San Antonio, Texas, went to school carrying a concealed .38-caliber handgun and five bullets. School officials, acting on an...

The certified public accounting partnership of James, Guinn, and Head prepared a certified audit report of four corporations, known as the Paschal Enterprises, with knowledge that their report would...

Bernadette, a longtime client of yours, is an architect and the president of the local Rotary chapter. To keep up to date with the latest developments in her profession, she attends continuing...

Turnaround LLC was formed several years ago. It incurred losses for several years, reducing many of its members bases in their interests to zero. However, the business has recently obtained some new...

Charles Nobel works as a television talk show host for Broadcast Inc. In 2013, Charles generated substantial income from his employment. His wages from Broadcast were approximately $ 100,000 in 2013....

Congress recently enacted a nonrefundable credit based on the cost of qualifying alcohol and drug abuse counseling programs provided by any corporate employer to its employees. The credit is limited...

Helmut exchanges his apartment complex for Heidis farm, and the exchange qualifies as a like-kind exchange. Helmuts adjusted basis for the apartment complex is $600,000 and the complex is subject to...

P and S Corporations comprise an affiliated group that files separate tax returns. P and S had no intercompany inventory sales before the current year (Year 1). P and S use the first-in, first-out...

Did the parties have a valid contract under the UCC? Were any terms left open in the contract? If so, which terms? How would a court deal with open terms?

Ronald Anderson Jr. is a self-employed construction contractor from New York. While working on a project in Connecticut, Anderson purchased lumber from a Home Depot in Danbury, Connecticut. Wishing...

Compute the taxable income for 2014 in each of the following independent situations: a. Drew and Meg, ages 40 and 41, respectively, are married and file a joint return. In addition to four dependent...

Helper, a delivery boy for Gunn, delivered two heavy packages of groceries to Reeds porch. As instructed by Gunn, Helper rang the bell to let Reed know the groceries had arrived. Mrs. Reed came to...

C. Tyler Williams Co. set up a committee called the Employee-Owners Influence Council (EOIC). All employees were encouraged to become members. Of 150 employees who applied, 30 of Tyler Williams 8,000...

Future Tech International, Inc., is a buyer and distributor of Samsung monitors and other computer products. In 1993, Future Tech determined that brand loyalty was important to customers, and it...

A computer printer distributor in Argentina receives an offer by mail from Epson, a U.S. company, in reply to an inquiry. The offer arrives in Argentina on June 2. On June 12, the Argentinean Company...

1. Why was it unclear whether Wards pretermination actions constituted direct competition with his employer or were mere planning activities? 2. Suppose that Wards planning and development efforts...

The chief financial officer of a profitable firm asks you to explain the advantages, if any, to his firm of overfunding the firms defined benefit pension plan. Do these advantages accrue to a firm...

Herbert, a collector of rare coins, bought a 1916 Spanish Bowlero for $ 2,000 in 1984. He sold the coin for $ 4,500 in January. Herbert retired from his loading dock job in June and began actively...

(Multiple Choice) 1. The most common account(s) manipulated when perpetrating financial statement fraud are: a. Expenses. b. Inventory. c. Revenues. d. Accounts Payable. 2. Why might a company want...

Rosie has owned a successful luncheonette for several years. Tired of the long hours and eager to try another way of life, she decides to buy a fishing boat and start a charter service near Key West....

For 2015, Mario, a single individual with no dependents, receives income of $55,000 and incurs deductible expenses of $9,000. a. What is Marios taxable income assuming that the expenses are...

As part of a Type C reorganization, Tulsa Corporation exchanges assets having a $300,000 FMV and a $175,000 adjusted basis for $250,000 of Akron Corporation voting common stock and Akrons assumption...

In 2008, the Ryan Corporation sold a capital asset and incurred a $40,000 LTCL that was carried forward to subsequent years. That sale was the only sale of a capital asset that Ryan made until 2013,...

How is the four-column template in Concept Summary 7.1 used to determine a shareholder's basis in the stock received in a corporate restructuring?

Fish, Inc., an exempt organization, reports unrelated business income of $500,000 (before any charitable contribution deduction). During the year, Fish makes charitable contributions of $54,000, of...

In this assignment, draft the letter for the signature of the supervising attorney, Alice Black. Use the letterhead presented in the Application section of this chapter. Mr. Sanderss address is 930...

Wayne is single and has no dependents. Without considering his $11,000 adjusted net capital gain (ANCG), his taxable income, which includes no investment income, in 2015 is as follows: a. What is...

Alabre Corporation has 150,000 shares of common stock outstanding and pays quarterly dividends of $0.15 per share. At the beginning of the current year, the balance in its accumulated E&P account is...

John and Jean own 80% and 20%, respectively, of Plum Corporation stock. Thanks to their hard work, Plums software sales have sky rocketed. In its first year of operation Plums earnings were minimal,...

In the oil theft case discussed in this chapter, the fraud investigators conducted a week-long invigilation. The results from this period were compared to the results taken during the weeks...

Paul and Donna Decker are married taxpayers, ages 44 and 42, respectively, who file a joint return for 2014. The Deckers live at 1121 College Avenue, Carmel, IN 46032. Paul is an assistant manager at...

Legislative Act: Section 40-3-6-9A of the state criminal code provides that a noncustodial parent may be convicted of custodial interference when the noncustodial parent "maliciously takes, detains,...

Kathy, who is single and 25, inherited $7,000 from her grandmother. A coworker has suggested that Kathy open an Individual Retirement Account with the $7,000. Her friend says that an IRA is a great...

For 2016, Sherri has a short-term loss of $2,500 and a long-term loss of $4,750. a. How much loss can Sherri deduct in 2016? b. How much loss will Sherri carryover to 2017, and what is the character...

You are having lunch with another graduate student. During the course of your conversation, you tell your friend about your new fraud examination class. After you explain the devastating impact of...

The concept of substantial performance permits a party to be discharged from a contract even though the party has not fully performed her or his obligations according to the contracts terms. Is this...

1. Why did Aquino have the burden of proving that Hondas reason for discharging him was pretext? Didnt he already prove a prima facie case? 2. Considering the criminal charges against him were...

Find the court decision located at T. C. Memo. 1992-204. a. Which court heard the case? b. Who was the judge(s)? c. Which tax year(s) is in question and in what year was the case decided? d. Which...

Peter owns 50% of Air South Corporation, an air charter service. His S corporation stock basis at beginning of the year is $100,000. Air South has not done well this year and will report an ordinary...

The Michigan Freedom of Information Act declares that it is the states policy to give all persons full information about the actions of the government and that the people shall be informed so that...

During the current year, Seans office building is destroyed by fire. After collecting the insurance proceeds, Sean has a $50,000 recognized gain. The building was acquired in 1998, and the...

Perform vertical analysis of the data in the previous table to indicate any potential red flags regarding possible understatement of theCOGS. FIVE-YEAR FINANCIAL DATA FOR COMPANY A YEAR I YEAR 2...

The Jacob Hartz Seed Company, Inc. (Hartz), bought soybeans for use as seed from E. R. Coleman. Coleman certified that the seed had an 80 percent germination rate. Hartz paid for the beans and picked...

Advertisements for Listerine mouthwash claimed that it was as effective as flossing in preventing tooth plaque and gum disease. This statement was true, but only if the flossing was done incorrectly....

Bachowski was defeated in a United Steelworkers of America union election. After exhausting his union remedies, Bachowski filed a complaint with Secretary of Labor Dunlop. Bachowski invoked the...