ABC Company manufactures and sells software packages to small businesses. The company has enjoyed great success since it began business in 1998. Last year, the firm doubled its revenues, and its...

Jacqueline Barden was shopping for school clothes with her children when her purse and automobile were taken. In Bardens purse were her car keys, credit and debit cards for herself and her children,...

Evan is the sole shareholder of Magic Roofing Company, a calendar year S corporation. Although Evan spends at least 30 hours per week supervising Magics employees, he has never drawn a salary from...

Bigelow Corporation has total assets of $850,000, sales of $1,350,000, and one class of common stock with 375 shareholders, and a class of preferred stock with 250 shareholders, both of which are...

What is the term for the right of Roche citizens to walk across Shoepkes land on the trail? Vern Shoepke purchased a two-story home from Walter and Eliza Bruster in the town of Roche, Maine. The...

Betty Jo Harris lives in Maine with her son, Rick, and husband, Walter Reed. Rick has Lou Gehrigs disease. Ricks physician encourages Betty Jo to go to a conference at the Mayo Clinic in Rochester,...

Two years ago, your best friend Scott Adams started a home business selling custom-made chairs and tables. His original designs quickly became popular, and he began selling in large quantities. To...

Harmony, Inc., an exempt organization, reports unrelated business income of $7,500 and unrelated business expenses of $4,000. Calculate Harmony's UBIT.

The Lewiston Lodge of Elks sponsored a golf tournament at the Fairlawn Country Club in Poland, Maine. For promotional purposes, Marcel Motors, an automobile dealership, agreed to give any golfer who...

Singh, a qualified appraiser of fine art and other collectibles, was advising Colleen when she was determining the amount of the charitable contribution deduction for a gift of sculpture to a museum....

Does Sec. 351 apply to property transfers to an existing corporation? Suppose Carl and Lynn each own 50 shares of North Corporation stock. Carl transfers property worth $50,000 to North for an...

On December 2, 2010, Miles executed and delivered to Proctor a negotiable promissory note for $10,000, payable to Proctor or order, due March 2, 2011, with interest at 6 percent from maturity, in...

E. S. Herrick Co. grows and sells blueberries. Maine Wild Blueberry Co. agreed to buy all of Herricks 1990 crop under a contract that left the price unliquidated. Herrick delivered the berries, but a...

1. Why did the court use the term creditor beneficiary to describe Allan? 2. Suppose that Allan had sued Koraev for negligence. Would she have been successful? Discuss your answer. [Autumn] Allan and...

Multiple Choice Question 1. In which case is a court most likely to enforce an exculpatory clause? A. Dentistry B. Hang gliding C. Parking lot D. Public transportation E. Accounting 2. Sarah, age 17,...

Self-described "sports nut" Gary Baker signed up for a three-year club-seat "package" that entitled him and a companion to tickets for 41 Boston Bruin hockey games and 41 Boston Celtic basketball...

Paul and Wayne equally own the PW Partnership. Paul's basis was $30,000 and Wayne's basis was $22,000 at the beginning of the year. PW Partnership had the following income and expense items:...

(a) Smith, a director of the Sample Corporation, sells a piece of vacant land to the Sample Corporation for $500,000. The land cost him $200,000. (b) Jones, a shareholder of the Sample Corporation,...

1. 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? 2....

Right before his death from a terminal affliction, Ed makes a gift of $500,000 cash that he had planned to bequeath to the church anyway. Presuming Ed had a marginal income tax rate of 35% and his...

Mary, a U.S. citizen, is the sole shareholder of CanCo, a Canadian corporation. During its first year of operations, CanCo earns $14 million of foreign-source taxable income, pays $6 million of...

Rufous Corporation just lost a $1.5 million product liability lawsuit. Its assets currently are worth $2 million and its outstanding liabilities amount to $800,000 without considering the lawsuit...

When Phil died in the current year, he owned shares of Orange Corporation which are traded in the over-the-counter market. The market trades before and after Phils date of death occurred as follows....

EFG, a calendar year, accrual basis corporation, reported $479,900 net income after tax on its financial statements prepared in accordance with GAAP. The corporations financial records reveal the...

Latrisha is an employee of the Cooper Company and incurs significant employment-related expenses. During the current year, she incurred the following expenses in connection with her job: Airfare...

Stein, a mechanic, and Beal, a life insurance agent, entered into a written contract for the sale of Steins tractor to Beal for $6,800 cash. It was agreed that Stein would tune the motor on the...

Tern Corporation produces and sells refrigerators for outdoor use (e.g., patios, porches, and verandas). Its major manufacturing facility is in Georgia, but it also has a smaller plant in Nicaragua....

Ricardo owns a small unincorporated business. His 15-year-old daughter Jane works in the business on a part-time basis and was paid wages of $3,000 during the current year. Who is taxed on the childs...

Woolard Inc. has taxable income in 2014of $150,000 before any depreciation deductions (179, bonus, or MACRS) and acquired the following assets during the year: Asset ................................

McInnis purchased a tractor and scraper as new equipment of the current model year from Western Tractor & Equipment Co. The written contract stated that the seller disclaimed all warranties and that...

Phillips, an African-American woman, applied for a position as secretary at the Mississippi legislature as a walk-in applicant. Phillips worked in the same building, which was made up of...

The marbled murrelet is a seabird on the list of endangered species. Pacific Lumber Co. received permission to harvest trees from land on which the murrelet nested, on the condition that it would...

Larkin, Inc., retains Howard Patterson to manage its books and prepare its financial statements. Patterson, a certified public accountant, lives in Indiana and practices there. After twenty years,...

The text of a handwritten note stated simply that I Robert Harrison owe Peter Jacob $25,000 ., /s/ Robert Harrison. Peter Jacob sought to use the handwritten note as a negotiable promissory note. Can...

Did Matlin commit a misrepresentation on his policy application? Provident Insurance, Inc., issued an insurance policy to a company providing an employee, Steve Matlin, with disability insurance....

What financing alternatives would be available to a U.S. firm that was interested in investing in a proposed manufacturing plant in a small country that recently left the communist bloc and did not...

Carl and Carol have salaries of $14,000 and $22,000, respectively. Their itemized deductions total $8,500. They are married and both are under age 65. a. Compute their taxable income assuming they...

Vivians AGI is $40,000 without considering the gains and losses below. Determine her revised AGI after the inclusion of any applicable gains or losses for the following independent cases. Assume she...

Abe 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 $100,000 per...

Mr. and Mrs. Morris own a grocery store as a sole proprietorship. Their net profit and other relevant items for the year are: Grocery store net profit . $44,000 Deduction for SE tax . (3,109)...

Multiple Choice Questions 1. Glenn and Mary's house was damaged by a hurricane in 2016. The fair value of their home before the hurricane was $150,000. After the hurricane, the fair value of their...

Gaffey Corporation obtained permission to change from a calendar year to a fiscal year ending May 31, beginning in 2016. For the short period January 1 through May 31, 2016, the corporation's taxable...

1. Antonia wants to buy a car. The dealer permits her to take an automobile home to show her mother. On the way home, she gets into an accident. Is Antonia an agent for the dealer? (If she is, the...

Healthwin-Midtown Convalescent Hospital, Inc. (Healthwin), was incorporated in California for the purpose of operating a health-care facility. For three years thereafter, it participated as a...

Joseph Thompson is president and sole shareholder of Jay Corporation. In December 2015, Joe asks your advice regarding a charitable contribution he plans to have the corporation make to the...

Alex is a wage earner with a regular income. He has unsecured debts of $42,000 and secured debts owing to Betty, Connie, David, and Eunice totaling $120,000. Eunices debt is secured only by a...

Under the current UPA, can Als Feed Barn bring an action against Jason individually for the Cowboy Palaces debt? Why or why not? Grace Tarnavsky and her sons, Manny and Jason, bought a ranch known as...

Suppose you work for a business that runs a fleet of cars the sales personnel use. The fleet consists of 30 Toyota Camry sedans. All the expenses (insurance, registration, fuel, maintenance, and...

Sara, a lawyer, drew a deed for Robert by which Robert was to convey land to Rick. The deed was correct in every detail. Robert examined and verbally approved it but did not sign it. Sara erased...

David Sutherland, a partner and fraud examiner in Rachin Cohen & Holtz LLP, was driving to a client when he heard a CNN announcement that LucidCom, a newly emerged provider of network infrastructure...

Edgar Bronfman, Jr., dropped out of high school to go to Hollywood and write songs and produce movies. Eventually, he left Hollywood to work in the family businessthe Bronfmans owned 36 percent of...

Based only on the facts described above, could Trent and Xavier sue the makers of Halo 2 for copyright infringement? Why or why not? Two computer science majors, Trent and Xavier, have an idea for a...

Intex Recreation Corporation designed and sold the Extreme Sno Tube II. This snow tube is ridden by a user down snow covered hills and can reach speeds of 30 miles per hour. The snow tube has no...

Velocity, Inc., a foreign corporation, operates a U.S. branch. It reports the following tax results and other information for the year. Pretax earnings effectively connected with a U.S. trade or...

Firm PO and Corporation QR exchanged the following business real estate: a. If POs adjusted basis in Marvin Gardens was $403,000, compute POs realized gain, recognized gain, and basis in Boardwalk....

A group of fraud examiners is coordinating an investigation at a local law firm. Several lawyers at the firm are suspected of overbilling clients, possibly creating fake client accounts, and then...

Your company, Insecure Inc., is a security investigation firm. You have been contacted by Darling Company, a producer of cardstock for greeting card companies like Hall mike and Birthday Wishes...

Correct the following sentences and identify why they are incorrect 1. He statute requires the witnesses to be present when the testator signs the will, and the witnesses must be in the same room...

McDowell owned and operated Big River Harley Davidson in Wapello, Iowa. As required by law, McDowell took out a retail motor vehicle dealer's surety bond for $35,000 with United Fire and Casualty...

John is the manager of a small computer sales and support chain. He has stores located throughout the state of California and is in strong competition with all of the major computer providers within...

A North Carolina Department of Transportation regulation prohibits the placement of telephone booths within public rights-of-way. Despite this regulation, GTE South, Inc., placed a booth in the...

Sun Airlines, Inc., prints on its tickets that it is not liable for any injury to a passenger caused by the airlines negligence. If the cause of an accident is found to be the airlines negligence,...

David Gain was chief executive officer (CEO) of Forest Media Corp., which became interested in acquiring RS Communications, Inc., in 2010. To initiate negotiations, Gain met with RSs CEO, Gill Raz,...

1. Why didnt the contract order signed by the parties constitute a binding contract for the sale of goods? 2. According to the court, Romero and Scoggin-Dickey were both buyers and sellers. What did...

Quinlan has ample E & P to cover any distributions made during the year. One distribution made to a shareholder consists of property with an adjusted basis of $150,000 and a fair market value of...

Correct the paragraphs presented in part A and part B. Use the proofreading checklist presented in Exhibit 14-4. Part A The governments' first witness at Bean's sentencing were the DEA Task Force...

Jake purchased a $225,000 crane for his construction business. He sold the crane for $170,000 after taking $115,000 of depreciation. Assume Jake is in the 33% tax rate bracket. a. On what form would...

Gore had been the owner of 1 percent of the outstanding shares of the Webster Company, a corporation, since its organization ten years ago. Ratliff, the president of the company, was the owner of 70...

Bende had a contract to sell boots to the government of Ghana for $158,500. Bende promised to deliver the boots as soon as possible. Bende then contracted with Kiffe, who agreed to make the boots in...

Taxpayer Y, who has a 30 percent marginal tax rate, invested $65,000 in a bond that pays 8 percent annual interest. Compute Ys annual net cash flow from this investment assuming that: a. The interest...

Go to Case 21.3,Spray-Tek, Inc. v. Robbins Motor Transportation, Inc., 426 F.Supp.2d 875 (W.D. Wis. 2006), on pages 428430. Read the excerpt and answer the following questions. (a) Issue: What...

Cooperative enterprises are collectively owned, and their affairs are directed through shared governance. Use the preceding theory to discuss the management of some cooperative enterprises with which...

Yarde Metals, Inc., owned six season tickets to New England Patriots football games. Gillette Stadium, where the games are played, had insufficient mens restrooms in use for football games at that...

Which of the following taxpayers must file a 2015 return? a. Amy, age 19 and single, has $8,050 of wages, $800 of interest, and $350 of self- employment income. b. Betty, age 67 and single, has a...

Peter Jones has owned all 100 shares of Trenton Corporation stock for the past five years. This year, Mary Smith contributes property with a $50,000 basis and an $80,000 FMV for 80 newly issued...

Suppose that the SEC asserts that it has always had the statutory authority to pursue persons for insider trading regardless of whether they personally profited from the transaction. This is the only...

(Multiple Choice) 1. The formula to calculate funds from unknown sources is: a. Assets Liabilities Prior Years Net Worth + Living Expenses Funds from Known Sources. b. Assets Liabilities Prior...

Egil Krogh, Jr., was admitted [to practice] law in the state of Washington on September 20, 1968. On February 4, 1974, he was suspended as a result of his having been convicted of a felony. [Krogh...

Food Caterers of East Hartford, Connecticut, obtained a franchise from Chicken Delight to use that name at its store. Food Caterers agreed to the product standards and controls specified by the...

In 2012, Harry and Mary purchased Series EE bonds, and in 2016 redeemed the bonds, receiving $500 of interest and $1,500 of principal. Their income from other sources totaled $30,000. They paid...

Emelio and Charita are married taxpayers with 2 dependent children. Emelio starts a computer consulting business in 2011. Charita works as a real estate broker. During 2011, they have the following...

You are a CPA who has been preparing tax returns for Sign, Seal, and Deliver, a midsize CPA firm, for the last 5 years. During the current year, you are assigned the individual return of a new...

In 2004, Frank made an installment sale of real property to Stu, his son, for $1 million. Payments are due over a 10-year period. Frank did not file a gift tax return. For 2011, Frank reported...

Linda induced Sally to enter into a purchase of a home theater receiver by intentionally misrepresenting the power output to be seventy-five watts when in fact the unit delivered only forty watts....

What type of agreement did the Hyatts form with Cyber Tool? Ted and Betty Hyatt live in California, a state that has extensive statutory protection for consumers. The Hyatts decided to buy a computer...

Sean, a shareholder of Crimson Corporation, is in the 35% tax bracket. This year, he receives a $7,000 qualified dividend from Crimson. Sean has investment interest expense of $16,000 and net...

1. a. According to the court, did the defendant seller engage in a fraudulent misrepresentation in failing to disclose the ghostly condition of her house? b. The plaintiff won this case on...

You and two of your college roommates have discussed plans to open a restaurant. You intend to attract college-age students who are health- and fitness-minded to your restaurant. You and your...

Turtle, a C corporation, has taxable income of $300,000 before paying salaries to the three equal shareholder-employees, Britney, Shania, and Alan. Turtle follows a policy of distributing all...

Overton suffered from depression and was made sleepy at work by medication taken for this condition. Also, because of his medical condition, Overton needed a work area away from public access and...

In March 1998, forty-three-year-old Peter Barnes read an ad in the Chicago Tribune that Pentrix was seeking experienced word processors to work in its Chicago office. Pentrix is a national...

Daniel, a recent college graduate, is on his way home for the Christmas holidays from his new job. He gets caught in a snowstorm and is taken in by an elderly couple, who provide him with food and...

Part A Read Dean v. Dickey in Appendix A. Identify the issue regarding the validity of the will. Part B Read United States v. Martinez-Jimenez in Appendix A. Identify the issue concerning whether the...

Juan is an elderly man who lives with his nephew, Samuel. Juan is totally dependent on Samuels support. Samuel tells Juan that unless he transfers a tract of land he owns to Samuel for a price 35...

Suppose Sonics Inc. just started business this period. The firm purchased 400 units during the period at various prices as follows: The firm sold 250 units at $ 30 each on the following dates:...

Maria is a single taxpayer. Her salary is $51,000. Maria realized a short-term capital loss of $5,000. Her itemized deductions total $4,000. a. Compute Marias adjusted gross income. b. Compute her...

Louise Pulsifer owned a farm that she wanted to sell and ran an ad in the local newspaper. After Russell Gillespie agreed to purchase the farm, Pulsifer wrote him a letter stating that she would not...

Smith Services, Inc., a trucking business owned by Tony Smith, charged its fuel purchases to an account at Laker Express. When Smith Services was not paid on several contracts, it ceased doing...

On April 29, 2015, Auk Corporation acquires 100% of the outstanding stock of Amazon Corporation (E & P of $750,000) for $1.2 million. Amazon has assets with a fair market value of $1.4 million (basis...

Dr. Sanders is a veterinarian who is the sole shareholder of Vet, Inc., an S corporation. The corporation offers Dr. Sanders' consulting and surgical services to other veterinarians. Dr. Sanders does...