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 EEOC filed a lawsuit against NEA-Alaska, a labor union that represents teachers and other public school employees, alleging that the union had created a sex-based hostile work environment for...

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...

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...

The AB Partnership purchases plastic components and assembles childrens toys. The assembly operation requires a number of special machines that are housed in a building the partnership owns. The...

Eve bought defective ball bearings from Saginaw Corp. Alfred was the sole shareholder of the company and also its landlord. After Alfred sold all of Saginaws assets, he withheld enough money to cover...

Assume that Wrigley Juice is a corporation owned by Cora. Explain the effect of Wrigleys results on Coras tax return. Wrigley Juice has the following income, expense, and loss items for the current...

1. Why did the bank argue that UCC 4402 did not apply in this case? What did the court decide on this issue? 2. On what basis did the court reason that the bank may have wrongfully dishonored the...

Sam and Devon agree to go into business together selling college-licensed clothing. According to the agreement, Sam will contribute inventory valued at $100,000 in return for 80 percent of the stock...

Doris mistakenly accused Peters son, Steven, of negligently burning down her barn. Peter believed that his son was guilty of the wrong and that he, Peter, was personally liable for the damage, as...

Holly Hill Acres, Ltd. executed and delivered a promissory note and a purchase money mortgage to Rogers and Blythe. The note provided that it was secured by a mortgage on certain real estate and that...

Perform assignment 3 using a description of the title when drafting the law component, rather than a relevant portion of the title. Assignment 3 Part A Alice purchases a new toaster from a booth at...

With a loan of 1.4 million euros from Barclays Bank, PLC, Thomas Poynter bought a yacht. The loan agreement gave Barclays multiple stand- alone options on default. One option required the lender to...

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...

The defendant in a lawsuit is appealing the trial courts decision in favor of the plaintiff. On appeal, the defendant claims that the evidence presented at trial to support the plaintiffs claim was...

Would a person who adheres to the principle of rights consider it ethical for Arnett not to disclose potential safety concerns and to refuse to perform additional research on Kafluk? Why or why not?...

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...

Ninety-five percent of the customers of a weight loss center are women. Counselors at the center sell the weight loss program, interact with customers, provide instruction on diet programs, counsel...

Jay Corporation owns several automobile dealerships. This year, the corporation initiated a policy of giving the top salesperson at each dealership a free vacation trip to Florida. The president...

On October 1, George Jones entered into a contract with Johnson Motor Company, a dealer in automobiles, to buy a used car for $10,850. He paid $1,100 down and, under the agreement, was to make...

Explain whether the following instrument is negotiable. March 1, 2011 One month from date, I, James Jimson, hereby promise to pay Edmund Edwards: Six thousand, Seven hundred Fifty ($6,750.00)...

International Business Machines Corp. (IBM) hired Niels Jensen in 2000 as a software sales representative. In 2001, IBM presented a new Software Sales Incentive Plan (SIP) at a conference for its...

Ken was the only accountant for a small-town land development company. He was terminated when the company fell on hard times. One year later, when the owner of the company was reviewing the payments...

Rhonda Schroeder married Gennady Shvartsshteyn (Gene) in 1997. Gene worked at Royal Courier and Air Domestic Connect in Illinois, where Melissa Winyard also worked in 1999 and 2000. During this time,...

Coleman, a married taxpayer, is going to establish a manufacturing business. He anticipates that the business will be profitable immediately due to a patent he holds. He anticipates that profits for...

Joe Costa and Nelson Borges orally agreed to associate together to purchase and develop a 15-acre parcel of real property located in Jerome County, Idaho. They intended to develop a subdivision with...

Mineral Deposits, Ltd. (MD, Ltd.), an Australian company, manufactures the Reichert Spiral, a device used for recovering gold particles from sand and gravel. The spiral was patented in Australia, and...

Determine whether the following would be fixtures or personal property. a. Refrigerator in a home b. Refrigerators in an apartment complex with furnished units c. Refrigerators in a restaurant...

Sam and Drew are equal members of the SD LLC, formed on June 1 of the current year. Sam contributed land that he inherited from his uncle in 2006. Sam's uncle purchased the land in 1981 for $30,000....

Pedernales, a cash-rich Texas company that produces petrochemicals, would like to expand its operations in the Southwest. It considers acquiring Dorado, a Nevada corporation that disposes chemical...

Suppose the statute of limitations for adverse possession is 10 years. After 9.9 years of trespass owners retain full rights, but after 10 years of trespass owners lose all of their rights. Instead...

a. What are the seven major types of fringe benefits covered by Sec. 132? b. What tax advantage is offered relative to such benefits? c. Are such benefits available to employees only or may the...

This year, Darrel's distributive share from Alcove Partnership includes $6,000 of interest income, $3,000 of dividend income, and $70,000 ordinary business income. a. Assume that Darrel materially...

Can Shoepke hold Slater financially responsible for the damage to the carpeting caused by Indalecio? Vern Shoepke purchased a two-story home from Walter and Eliza Bruster in the town of Roche, Maine....

James Carpenter contracted with Austin Estates, LP, to buy property in Texas. Carpenter asked Sandra McBeth to invest in the deal. He admitted that a dispute had arisen with the city of Austin over...

PAJ, Inc., a jewelry company, had a commercial general liability (CGL) policy from Hanover Insurance Co. It covered, among other things, liability for advertising injury. The policy required PAJ to...

AES was formed in 1996, at which time it hired eight employees. At a meeting of these employees in 1997, they expressed concern that the company might not survive, as it was using outdated equipment....

At the time of his death this year on September 4, Kenneth owned the following assets. Fair Market Value City of Boston bonds $2,500,000 Stock in Brown Corporation 900,000 Promissory note issued by...

John Novosel was employed by Nationwide Insurance Company for fifteen years. Novosel had been a model employee and, at the time of discharge, was a district claims manager and a candidate for the...

Shane has a requirements contract with Sky that obligates Sky to supply Shane with all the gasoline Shane needs for his delivery trucks for one year at $2.30 per gallon. A clause inserted in small...

Maureen brings her same-gender partner of 14 years to a company picnic. One of the other employees treats Maureen poorly after realizing she is a lesbian. Does Maureen have any recourse?

Two shareholders of Bruce Co., Harry and Yolan Gilbert, were fighting management for control of the company. They asked for permission to inspect Bruces stockholder list so that they could either...

Jacob Phillips and his wife, Charlene, jointly owned the Village Variety 5 & 10 Store in Bluefield, Virginia. In addition, Mrs. Phillips was a computer science teacher at the Wytheville Community...

Bluebird, Inc., does not provide its employees with any tax-exempt fringe benefits. The company is considering adopting a hospital and medical benefits insurance plan that will cost approximately...

Michelle pays a CPA $400 for the preparation of her federal income tax return. Michelles only sources of income are her salary from employment and interest and dividends from her investments. a. Is...

James Lillards first wife had a child whom James adopted when he married that childs mother. James fathered other children with her until they divorced in the early 1970s. In 1975, James married his...

Faraway Corp. is considering entering into two contracts, one with a joint stock company that distributes home products east of the Mississippi River and the other with a business trust formed by a...

Esther owns a large home on the East Coast. Her home is surrounded by large, mature oak trees that significantly increase the value of her home. In August 2015, a hurricane damaged many of the trees...

On March 10, Tolliver Tolles, also known as Thomas Towle, delivered to Alonzo Craig and Abigail Craig the following instrument, written by him in pencil: For value received, I, Thomas Towle, promise...

Virginia, Georgia, Carolina, and Louis were partners doing business under the trade name of Morning Glory Nursery. Virginia owned a one-third interest, and Georgia, Carolina, and Louis owned...

Cathy, who is single, makes gifts of $50,000 to each of her two adult children. a. Who is primarily liable for the gift tax on the two gifts, Cathy or the two children? b. If Cathy has never made a...

Mickey and Jenny Porter file a joint tax return, and they itemize deductions. The Porters incur $2,000 in employment-related miscellaneous itemized deductions. They also incur $3,000 of investment...

During the year, Ricardo made the following contributions to a qualified public charity: Cash ...............................................................................$220,000 Stock in Seagull,...

On November 4, Kim contracted to sell to Lynn 500 sacks of flour at $4 each to be delivered to Lynn by December 12. On November 27, Kim shipped the flour. By December 5, when the shipment arrived,...

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...

Jonnel Enterprises, Inc., contracted to construct a student dormitory at Clarion State College. On May 6, Jonnel entered into a written agreement with Graham and Long as electrical contractors to...

Moriarity and Holmes enter into an oral contract by which Moriarity promises to sell and Holmes promises to buy Blackacre for $100,000. Moriarity repudiates the contract by writing a letter to Holmes...

Arnold executed a one-page will, in which he devised his farm to Burton. Later, as the result of a quarrel with Burton, Arnold wrote the words, I hereby cancel and revoke this will /s/Arnold, in the...

Binh has a 50% interest in the Lamonica Partnership with a basis of $10,000 at the end of the year before accounting for his share of the current years losses. The partnership suffers ordinary losses...

When Nitrogen Media was acquired by General Electric's NBC Universal unit, Nitrogen's Vice President of Finance, Babs Grogan, was terminated as a Nitrogen employee, but hired by NBCU as an outside...

In the current year Alice reports $150,000 of salary income, $20,000 of income from activity X, and $35,000 and $15,000 losses from activities Y and Z, respectively. All three activities are passive...

In 1967, large oil reserves were discovered in the Prudhoe Bay area of Alaska. As a result, State revenues increased from $124 million in 1969 to $3.7 billion in 1981. In 1980, the State legislature...

Explain why improper capitalization of amounts spent could result in financial statement fraud and overstatement of assets.

Pauline is considering investing in bonds. Her broker has given her two options to consider. The first is to invest in city bonds with an interest rate of 6%. The second option is the purchase of...

The supervising attorney is interested in online patent searching. Refer to the Current Law Index. What 1997 law review addresses this topic?

Hernandez, which has been an S corporation since inception, is subject to tax in States Y and Z. On Schedule K of its Federal Form 1120S, Hernandez reported ordinary income of $500,000 from its...

Parent Corporation owns 100% of Subsidiary Corporations stock. The adjusted basis of its stock investment is $175,000. A plan of liquidation is adopted, and Subsidiary distributes to Parent assets...

Tim suffered greatly this year. In January a freak storm damaged his sailboat and in July Tim's motorcycle was stolen from his vacation home. Tim originally paid $27,000 for the boat, but he was able...

The Federal Crop Insurance Corporation (FCIC) was created as a wholly government-owned corporation to insure wheat producers against unavoidable crop failure. As required by law, the FCIC published...

Little Switzerland Brewing Company was incorporated on January 28. On February 18, Ellison and Oxley were made directors of the company after they purchased some stock. Then, on September 25, Ellison...

Based on these facts, describe any transfer or presentment warranties that Mahar may have violated. Nancy Mahar was the office manager at Golden Years Nursing Home, Inc. She was given a signature...

Peter and Tanya Rothing operated Diamond R Stables near Belgrade, Montana, where they bred, trained, and sold horses. Arnold Kallestad owned a ranch in Gallatin County, Montana, where he grew hay and...

List the structural and compliance requirements under Federal income tax law that must be met before a parent and its affiliates are allowed to file on a consolidated basis. Consider only the...

Assume the same facts as in Problem 7-35. In addition, assume that in 2016, Angela receives an additional $7,000 in a settlement of a lawsuit arising because of the snow-skiing accident. $4,000 of...

Consider the following two-country model of the market for spinach. All producers and consumers take the price of spinach as given. Home's supply curve for spinach is given by SH = 5 + P, where sH is...

During the 2001 baseball season, San Francisco Giants player Barry Bonds hit 73 home runs, a new record that broke the one set by Mark McGwire in 2000 (72 home runs). FN Be sure to read the text box...

Peaberry Coffee, Inc., owned and operated about twenty company stores in the Denver area. The company began a franchise program and prepared a disclosure document as required by the Federal Trade...

Tom is a CPA for a large regional firm. In preparing the tax return for Espresso Industries, he notices that the firm has an unusually high amount of travel, meal, and entertainment expenses....

Shareholders of Bear Stearns sued the directors of the corporation for damages for violation of the directors fiduciary duties in effecting a stock-for-stock merger with J. P. Morgan Chase for an...

Hawkeye Networks is a U.S. corporation with no foreign-source income of its own, but it does have wholly owned subsidiaries in Korea and Singapore. The Korean subsidiary has $43 million of pre-tax...

Cougar Company is owned equally by Cat Stevens and a partnership that is owned equally by his father and two unrelated individuals. Cat and the partnership each own 3,000 shares in the company. Cat...

Oak Corp., a calendar-year corporation, was formed three years ago by its sole shareholder, Glover, and has always operated as a C corporation. However, at the beginning of this year, Glover made a...

Timothy retains Cynthia, an attorney, to bring a lawsuit upon a valid claim against Vincent. Cynthia fails to make herself aware of recently enacted legislation that shortens the statute of...

Orso, who had declared bankruptcy, received a structured tort settlement in a personal injury claim he had pending. The settlement would pay him an annuity each year for 30 years because the claim...

THE ETHICAL DIMENSION Collier contended that there was a serious question as to whether he would even need experts to prove his medical malpractice claim. Is it fair to Collier to prevent the trial...

Jolie Glenn placed her 3- year- old daughter, Brittany, in a car with the engine running while it was parked in her garage with the garage door closed. Glenn went back into the house, sat down, and...

This year, FGH Partnership generated $600,000 ordinary business income. FGH has two equal partners: Triad LLC and Beta, an S corporation. Triad LLC has three members: Mr. T, who owns a 40 percent...

Horne executed a $100,000 note in favor of R. C. Clark. On the back of the instrument was a restriction stating that the note could not be transferred, pledged, or otherwise assigned without Hornes...

Mallory promises a local hardware store that she will pay for a lawn mower that her brother is purchasing on credit if the brother fails to pay the debt. Must this promise be in writing to be...

Lucia has acquired one share of common stock of a multimillion-dollar corporation with more than 500,000 shareholders. Lucias ownership interest is so small that she is not sure what her rights are...

Based on the discussion in the chapter, evaluate how well each of these taxes meets Adam Smith's four requirements: a. Income tax b. Employment taxes

Videotape is recorded magnetically. The magnetic particles that constitute the recorded image are bound to the tapes polyester base. The binder that holds the particles to the base breaks down over...

Mr. Pauper and Mrs. Queen are the equal shareholders in Corporation PQ. Both shareholders have a 39.6 percent marginal tax rate. PQs financial records show the following: Gross income from sales of...

During the current year, Helen donates stock worth $50,000 to her local community college. Two years ago the stock cost Helen $40,000. Her AGI for the current year is $100,000. Beginning next year,...

In October 2010, Jose acquired 100% of Acorn Corporation common stock by transferring property with an adjusted basis of $1,000,000 and fair market value of $4,000,000. Acorn is a qualified small...

Harvey Hilgendorf was a licensed real estate broker acting as the agent of the Hagues in the sale of eighty acres of farmland. The Hagues, however, terminated Hilgendorfs agency before the expiration...

InterBel Telephone Cooperative, Inc., is a Montana corporation organized under the Montana Rural Electric and Telephone Cooperative Act. This statute limits the purposes of such corporations to...

Assume that a Korean company manufacturing critical tail assemblies for commercial aircraft ships several defective assemblies to manufacturers in the United States. The CEO, a Korean national, was...

1. Can the court disregard the LLC entity in this situation? 2. Does fairness demand that Flahive be personally responsible for the LLCs negligence?

Debbie is 23 years old, a full-time student and a dependent of her parents. She earns $4,200 working part-time and receives $2,200 interest on savings. She saves both the salary and interest. What is...