Continue with the results of Problem 35. Prepare the GAAP journal entries for Brittons year 1 income tax expense. In problem Britton, Inc., an accrual basis C corporation, sells widgets on credit....

Sally was aware of a fraud being committed by one of her coworkers, but she never reported it. What are some possible reasons for her hesitancy to come forward?

Go to Case 3.1, Cruz v. Fagor America, Inc. Read the excerpt and answer the following questions. (a) Issue: On what preliminary step to litigation does the issue in this case focus? (b) Rule of Law:...

In New York City, 50 bakeries formed an association. They developed a system of distribution under which stores were allowed to buy only from a single baker. A store that wanted to shift to another...

For each of the following examples, identify whether the fraud is employee embezzlement, management fraud, investment scam, vendor fraud, customer fraud, or miscellaneous fraud. 1. Marcus bought a...

Jesse Spires was employed as a welder by Johnson Welded Products, Inc. Johnson Welded Products provides a lunchroom equipped with a microwave, refrigerator, and vending machine for sandwiches,...

Manny Fakhimi agreed to buy an apartment complex for $697,000 at an auction from David Mason. Fakhimi was obligated to put up 10 percent of the agreed-to price at the auction as a deposit. The...

Could the quarrys backhoe operator who punctured the pipeline also be charged with a crime in this situation? Explain. Edward Hanousek worked for Pacific & Arctic Railway and Navigation Company (P&A)...

Should Playskools request for summary judgment be granted? Why or why not? Ronald Metzgar placed his fifteen-month-old son, Matthew, awake and healthy, in his playpen. Ronald left the room for five...

Nellie works for a large Fortune 500 company. She heads the information systems department and works closely with the accounting department. The company works with many associates. They have many...

Shepherd Corporation is considering acquiring RentCo by exchanging its stock (value of $10 per share) for RentCo's only asset, a tract of land (adjusted basis of $150,000 and no liability). The...

Anna is about to buy a house on a hill. Prior to the purchase she obtains a promise from Betty, the owner of the adjacent property, that Betty will not build any structure that would block Annas...

Springer was a political candidate running for Congress. He was operating on a tight budget and instructed his campaign staff not to purchase any campaign materials without his explicit...

Susan Calles lived with her four daughters, Amanda, age eleven, Victoria, age five, and Jenna and Jillian, age three. In March 1998, Calles bought an Aim N Flame utility lighter, which she stored on...

Four friends plan to form a corporation for purposes of constructing a shopping center. Charlie will be contributing the land for the project and wants more security than shareholder status provides....

1. Why did the court conclude that the parties in this case were not bound by the settlement and release documents signed by Gyabaah? 2. Why did Aronsky fail to deliver the signed documents to Rivlab...

Three teenagers, Sarah Mitchell, Adam Jacobs, and David Messer, were driving in Mitchells car at 2:30 a.m. in Indianapolis, Indiana. Mitchell was driving the car, Jacobs was in the front passenger...

On May 10 of the current year, Stowe Corporation distributes to its shareholder Arlene $20,000 in cash and land (a capital asset) having a $50,000 FMV. The land has a $15,000 adjusted basis (for both...

Joe and Sharon Racca are married and have two children. Joe works as a sales manager for a national pharmaceutical company and Sharon is a nurse. They own a vacation home in New Hampshire that is...

Kerry is interested in selling her convenience store for approximately $250,000 to $300,000. As Kerry is unfamiliar with the commercial real estate market in Red Deer, she engages a real estate...

On a beautiful spring morning in 2002, Stephen Lowber, chief financial officer of Cutter and Buck, Inc., slowly arose from his bed, walked across the bedroom floor, and gazed out the window. It was a...

Lance contributed investment property worth $500,000, purchased three years ago for $200,000 cash, to Cloud Peak LLC in exchange for an 85 percent profits and capital interest in the LLC. Cloud Peak...

1. Should two partners who have agreed to separate be forced to continue the LLPs existence for a certain period of time? 2. Could it be argued that the debt actually was incurred once C&E had notice...

Where would you look to find the relevant California and federal laws? Suppose the California legislature passes a law that severely restricts carbon dioxide emissions from automobiles in that state....

Re/ Max International, Inc. (Re/ Max), is the owner and licensor of Re/ Max trademarks and sells Re/ Max franchises. Re/ Max, through a sub-franchisor, granted a franchise to Re/ Max Midtown to...

Last year, Pink Corporation acquired land and securities in a 351 tax-free exchange. On the date of the transfer, the land had a basis of $720,000 and a fair market value of $1 million, and the...

Continental Photo, Inc., is a portrait photography company. Alex Riley, a black man, applied for a position as a photographer with Continental. Riley submitted an application and was interviewed. In...

A corporation formed for the purpose of manufacturing, buying, selling, and dealing in drugs, chemicals, and similar products contracted to purchase, under authority of its board of directors, the...

Brian Cleary and Rita Burke filed a suit against the major cigarette maker Philip Morris USA, Inc., seeking class-action status for a claim of deceptive advertising. Cleary and Burke claimed that...

Broadbill Corporation (E & P $650,000) has 1,000 shares of common stock outstanding. The shares are owned by the following individuals: Tammy, 300 shares; Yvette, 400 shares; and Jeremy, 300 shares....

Gil makes out a $900 negotiable promissory note payable to Ben. By special indorsement, Ben transfers the note for value to Jess. By blank indorsement, Jess transfers the note for value to Pam. By...

Go to Case Analysis Case 49.3, Town of Midland v. Morris, on pages 967 969. Read the excerpt and answer the following questions. (a) Issue: On what issue did the parties ask the court to focus? (b)...

1. Ryder, a police officer in Philadelphia, was alone in his patrol car when he received a radio call of a man with a gun. Ryder was the first officer to arrive and was confronted by a suspect...

Clint, your client, owns a life insurance policy on his own life. He has paid $6,800 in premiums, and the cash surrender value of the policy is $30,000. Clint borrowed $30,000 from the insurance...

Brantley owns an automobile for personal use. The adjusted basis is $19,500, and the FMV is $16,000. Assume Brantley has owned the automobile for two years. a. Respond to the following if Brantley...

Medicis Pharmaceutical Corp. makes Solodyn, a prescription oral antibiotic. Medicis warns physicians that "autoimmune syndromes, including drug-induced lupus-like syndrome," may be associated with...

Sean Moon is president, secretary, treasurer, sole director, and sole shareholder of Streetz, an S corporation real estate company. He manages all aspects of the companys operations, and he is the...

Taser International, Inc., manufactures a product commonly known as a taser. Tasers have prongs or cords that emit high voltage electrical currents that, when they touch a persons body, immobilize...

Multiple Choice Questions 1. A valid defense in a defamation suit is A. Falseness B. Honest error C. Improbability D. Opinion E. Third-party reliance 2. Joe Student, irate that on an exam he received...

Determine consolidated taxable income for the calendar year Yeti Group, which elected consolidated status immediately upon the creation of the two member corporations on January 1 of year 1. All...

The December 31, 2015, balance sheet of the GAB LLP reads as follows: Capital is not a material income-producing factor for the LLP. Gina is an active (general) partner and owner of a 25% interest in...

Jayanthi and Krish each own a 50 percent general partner interest in the JK Partnership. The following information is available regarding the partnerships 2014 activities: Sales revenue $500,000...

Swift Corporation distributes land (basis of $55,000 and fair market value of $120,000) to Sam and cash ($240,000) to Allison in exchange for part of their stock. Other shareholders do not redeem any...

Two eight-year-old boys were seriously injured when riding Honda mini trail bikes provided by their parents. The boys were riding on public streets and ran a stop sign when they were hit by a truck....

In the following situations, certain events take place after the contracts are formed. Discuss which of these contracts are discharged because the events render the contracts impossible to perform....

Henry was owed $10,000 by Jones Corp. In consideration of the many odd jobs performed for him over the years by his nephew, Henry assigned the $10,000 claim to his nephew Charles. Henry died, and his...

Michael Scotto borrowed $ 2,970 from Cindy Vinueza. Both of their signatures appeared at the bottom of a note that stated, I Michael Scotto owe Cindy Vinueza $ 2,970 (two thousand and nine- hundred &...

Henry is a 50% partner in HJ Partnership. For 2015, the tax form he receives from HJ (Schedule K-1 of Form 1065) shows business income of $40,000. During 2015, Henry received a $10,000 distribution...

Mrs. Kirby purchased a wheelchair from NMC/ Continue Care. The wheelchair was customized for her and her home. When the wheelchair arrived, it was too wide to fit through the doorways in her home....

Adam is a traveling salesperson for Peter Petri Plumbing Supply Corp. Adam has express authority to solicit orders from customers and to offer a 5 percent discount if payment is made within thirty...

The tax credit for rehabilitation expenditures is available to help offset the costs related to substantially rehabilitating certain buildings. The credit is calculated on the rehabilitation...

LaVar Johnson was a retail representative for the Wheaton Company, a processor of consumer packaged goods like cereals and canned goods. Johnson's job was to visit grocery stores in his territory to...

At a local bank, Jack purchases for $100,000 a five-year CD listing title as follows: "Meredith, payable on death to Briana." Four years later, Meredith dies. Briana, Meredith's daughter, then...

Assume that you are the fraud expert for a large Fortune 500 company located in Miami, Florida. In a recent meeting with the executive committee, one of the officers explains that the fraud...

Dan and Lori Cole operated a Curves franchise exercise facility in Angola, Indiana, as a partnership. The firm leased commercial space from Flying Cat, LLC, for a renewable three-year term and...

Mike Thurmond operated Top Quality Auto Sales, a used car dealership. Top Quality financed its inventory of vehicles by obtaining credit under a financing arrangement with Indianapolis Car Exchange...

Jim and Pat are married and file jointly. In 2015, Jim earned a salary of $46,000. Pat is self-employed. Her gross business income was $49,000 and her business expenses totaled $24,000. Each...

(Multiple choice) 1. When vertical analysis is performed: a. Ratios are used to detect fraud. b. Changes in significant balance totals are examined. c. Financial statement balances are converted to...

Gamma Corporation sold the following property on March 3 of the current year: The corporation used the equipment, building, and land in its business and has held all the property for more than one...

Northwest Company operates manufacturing facilities in Portland, Oregon, and Vancouver, Canada. In the current year, the Portland plant generated $3.1 million net domestic income and the Vancouver...

Indicate whether Glenda can deduct the $5,000 payment in each of the following independent situations. a. Glenda is a supplier of medical supplies. In order to secure a large sales contract to the...

Sam said to Carol, Kim is going to sell me a good used car next Monday, then Ill deliver it to you in exchange for your microcomputer, but Id like to have the computer now. Relying on this statement,...

Eugene H. Emmick hired L. S. Hamm, an attorney, to draft his will. The will named Robert Lucas and others (Lucas) as beneficiaries. When Emmick died, it was discovered that the will was improperly...

Jamie purchased $100,000 of new office furniture for her business in June of the current year. Jamie understands that if she elects to use ADS to compute her regular income tax, there will be no...

Phillip and Evans form a business entity. Each contributes the following property. Three months later, the entity sells the land for $652,000 because of unexpected zoning problems. The proceeds are...

In consideration of $1,800 paid to him by Joyce, Hill gave Joyce a written option to purchase his house for $180,000 on or before April 1. Prior to April 1, Hill verbally agreed to extend the option...

(a) Why is the future of export controls in doubt? (b) What are some of the dangers associated with having an inadequate export control regime as nations combat terrorism? International Law and...

Lynn Jones, Shawn, Walt, and Donna are trying to decide whether they should organize a corporation and transfer their shares of stock in several corporations to this new corporation. All of their...

Sam Shiatsu is a self-employed massage therapist and is the brother-in-law of a partner in the CPA firm where you work. During tax year 2008, Sam worked as an assistant supervisor and clinician for...

Moab, Inc. manufactures and distributes high-tech biking gadgets. It has decided to streamline some of its operations so that it will be able to be more productive and efficient. Because of this...

Aaron bought a television set for personal use from Penny. Aaron properly signed a security agreement and paid Penny $125 down, as their agreement required. Penny did not file, and subsequently Aaron...

Snug Harbor Realty Co. had a checking account in First National Bank. When construction work was obtained by Snug Harbor, its superintendent, Magee, would examine the bills submitted for labor and...

Lopez always had taken his Form 1040 data to the franchise tax preparers in a local mall, but this year, his friend Cheryl asked to prepare his return. Cheryl quoted a reasonable fee, and Lopez...

Miller owns a personal residence with a fair market value of $195,000 and an outstanding first mortgage of $157,500. Miller gets a second mortgage on the residence and in return borrows $10,000 to...

Thomas Woeste ordered raw oysters at Washington Platform Saloon and Restaurant. After eating the oysters, Woeste died as a result of contracting the bacterium Vibrio vulnificus. Vibro vulnificus is a...

Ron and Megan Dible needed some extra money so they decided to charge money for viewing some sexually explicit photographs and videos of themselves that they had posted on the Internet. While this...

ABC Clothiers, Inc., has a contract with Taylor & Sons, a retailer, to deliver one thousand summer suits to Taylors place of business on or before May 1.On April 1, Taylor senior receives a letter...

1. Fraud perpetrators: a. Look like other criminals. b. Have profiles that look like most honest people. c. Are usually very young. d. Are none of the above. 2. Which of the following is not one of...

Refer to the individual rate schedules in Appendix C. a. What are the tax liability, the marginal tax rate, and the average tax rate for a married couple filing jointly with $51,900 taxable income?...

What types of indorsements are the following? (a) Pay to Monsein without recourse. (b) Pay to Allinore for collection. (c) I hereby assign all my rights, title, and interest in this note to Fullilove...

List the four methods used to perform analytical analyses to search for financial statement fraud symptoms. Give an example of each method as it applies to searching for symptoms related to...

1. Notwithstanding the law as applied, do you believe an employer should be able to change the terms of pension plan qualifications once individuals have begun to avail themselves of the benefits?...

Smith made a contract to sell automatic rifles to a foreign country. Because the sale of such weapons to that country was illegal under an act of Congress, the U.S. government prosecuted Smith for...

What are some nonstandard ways of trying to detect dishonest employees in the employee hiring process?

1. What duties did Brock, as a director, owe to Firm Body? 2. Does the fact that Brock owned shares in Sunglow establish a conflict of interest? Why or why not? 3. Suppose that Firm Body brought an...

In 1983 Ogle was the owner of two adjoining lots numbered 6 and 7 fronting at the north on a city street. In that year, she laid out and built a concrete driveway along and two feet in front of what...

Freedom of Speech Silvia, an attorney in Florida, also was a licensed certified public accountant (CPA) and a certified financial planner (CFP). Silvia placed an ad in the yellow pages listing her...

In 2002, Roy Martin and his wife, Alice, their son, Hiram, and Hirams wife, Myrna acquired title to a 240-acre farm. The deed ran to Roy Martin and Alice Martin, the father and mother, as joint...

Daniel is the owner of a chain of shoe stores. He hires Rubya to be the manager of a new store, which is to open in Grand Rapids, Michigan. Daniel, by written contract, agrees to pay Rubya a monthly...

You have been asked by a small credit union to help investigate an alleged fraud in a bankruptcy case in which it is involved. It wants you to start right away because it is worried that the debtor...

Drab Corporation just obtained exclusive rights to a new revolutionary fertilizer that is sure to be an instant success in the gardening industry. Unfortunately, Drab does not control the capital to...

Eleven years ago, Lynn Inc. purchased a warehouse for $315,000. This year, the corporation sold the warehouse to Firm D for $80,000 cash and Ds assumption of a $225,000 mortgage. Through date of...

What is the role of street culture and cognitive scripts in the commission of opportunity crimes, such as street robbery?

Suppose that at trial, Hanousek argued that he could not be convicted because he was not aware of the requirements of the CWA. Would this defense be successful? Why or why not? Edward Hanousek worked...

What is the maximum length of time Saldona would have been allowed to take leave to care for his injured spouse? Rick Saldona began working as a traveling salesperson for Aimer Winery in 1979. Sales...

Executive Financial Services, Inc. (EFS), purchased three tractors from Tri- County Farm Company (Tri- County), a John Deere dealership owned by Gene Mohr and James Loyd. The tractors cost $ 48,000,...

During the 1980s, the NCAA, a voluntary unincorporated association of approximately 1,100 educational institutions, became concerned over the steadily rising costs of maintaining competitive athletic...

Serge worked for Service Attendant Corporation (SAC). He requested time off under the Family and Medical Leave Act (FMLA) from April 29 through May 31 to undergo treatment for alcoholism. For the...

True or False: 1. A principal is always liable on a contract, whether he is fully disclosed, unidentified, or undisclosed. 2. When a contract goes wrong, a third party can always recover damages from...

Barbara Fox was the agent of Burt Hollander, a well-known athlete. She discovered that Tom Lanceford owned a 1957 Chevrolet convertible, which had been stored in a garage for the past 15 years. After...