Denton and Carlo were employed at an appliance plant. Their job required them to do occasional maintenance work while standing on a wire mesh twenty feet above the plant floor. Other employees had...

1. Was Acmes rejection lawful? 2. Did Acme give seasonable notification of rejection?

Butch Bishop operates a small international firm named Tile, Inc. A new treaty between the United States and Spain conflicts with a Section of the Internal Revenue Code. Butch asks you for advice. If...

Firms that incur a tax loss are allowed to carry back the tax loss to obtain a refund of taxes previously paid. To the extent the losses cannot be carried back to obtain a refund (because past...

Sid purchased an automobile for personal use on January 18, 2011 for $10,000. On January 1, 2015, Sid starts a small business and begins to use the automobile exclusively in the business. The...

Did Emerson violate Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5? Why or why not? Dale Emerson served as the chief financial officer for Reliant Electric Co., a distributor...

Benson purchased a new Ford Thunderbird automobile. She traded in her old car and used the Magnavox Employees Credit Union to finance the balance. The credit union took a security interest in the...

The accrual basis Four Winds Partnership owned and operated three storage facilities in Milwaukee, Wisconsin. The partnership did not have a 754 election in effect when partner Taylor sold her 25%...

Lavinia Lane received a check from Wilmore Enterprises, Inc., drawn on the Citizens Bank of Erehwon, in the sum of $10,000. Mrs. Lane indorsed the check Mrs. Lavinia Lane for deposit only, Account of...

Muriel Evans writes the following note on the back of an envelope: I, Muriel Evans, promise to pay Karen Marvin or bearer $100 on demand. Is this a negotiable instrument? Discuss fully

Dan Jones is the new CIO of Ricochet Systems, an Internet securities broker. After assessing the e-commerce risks in his company, he determines that passwords are a weak link that needs additional...

Our American legal system can seem confusing at first. Using your critical thinking skills to answer the following questions as you read this chapter will help you understand how our legal system...

1. Why did Ms. Ross state in the investigation that attorney Smith authorized her to sign pleadings on his behalf? 2. At what point in the facts do you think Smith could have righted the ship before...

Rejoice, Inc., a private foundation, has existed for 10 years. During this period, Rejoice has been unable to satisfy the requirements for classification as a private operating foundation. At the end...

In the current year, Melissa, a single employee whose AGI is $100,000 before any of the items below, incurs the following expenses: Safe deposit box rental for investments .. $ 100 Tax return...

Clarence Morgan, Jr., owned Easy Way Automotive, a car dealership in DLo, Mississippi. Easy Way sold a truck to Loyd Barnard, who signed a note for the amount of the price payable to Trustmark...

Kimberly is a developer of apartment complexes. Two years ago, she formed Deckside Apartments, a partnership, and initiates development of the Deckside Apartments complex. The Staten Investment Fund...

Ms. Jost participates in her employers Section 401(k) plan, which obligates the employer to contribute 25 cents for every dollar that an employee elects to contribute to the plan. This year, Ms....

In 2001, Ellen purchased a house for $60,000 to use as her personal residence. She paid $12,000 and borrowed $48,000 from the local savings and Loan Company. In 2005 she paid $10,000 to add a room to...

In the current year, Mikes AGI is $50,000. Mike has no miscellaneous itemized deductions other than the employment-related expenses listed below. Mike attends a professional trade association...

Alpha Corporation purchased 20% of Theta Corporations stock on each of the following dates in the current year: January 2, April 1, June 1, October 1, and December 31. a. Has a qualified stock...

Manila Corporation is organized in Country J. All of Manila's stock is owned by Simpson, a U.S. corporation. Indicate which of the following transactions generate Subpart F income. a. Manila...

What information must the city send to every household that the city supplies with water? In the late 1980s, residents of Lake Caliopa, Minnesota, began noticing an unusually high number of lung...

Charlie Waugh owned and operated an auto parts junkyard in Georgia. Charlies son, Mack, started working in the business part-time as a child and full-time when he left school at the age of sixteen....

Did any of the parties involved in this case commit an ethical violation? Discuss. Thomas Bracken (owner of 1513 North Wells, LLC), Mark Sutherland, and Alex Pearsall were limited partners in 1515...

Margaret Beattie was seriously injured in an automobile accident in Delaware and was rendered a quadriplegic following the accident. She filed suit against her husband for damages, alleging that his...

In March 2002, Finnin, McPherson, and Wright (FMW) approached Lindsay about selling his Honda Toyota dealership. Negotiations continued over the next few months, and the agreement was drafted in...

Three years ago and at a cost of $40,000, Paul Sanders acquired stock in a corporation that qualified as a small business corporation under 1244. A few months after he acquired the stock, when it...

Ms. White has been unlucky this year. On a business trip to Boston, her wallet (which contained $900 cash) was stolen. Her new automobile ($24,000 basis and FMV) was completely destroyed by a re, and...

TRUE/FALSE 1. A contract may not be rescinded based on puffery. 2. An agreement for the sale of a house does not need to be in writing if the deal will be completed within one year. 3. Noncompete...

Henry Hughes, who operates a department store, executed the following instrument: $2,600 Chicago, March 5, 2011 On July 1, 2011, I promise to pay Daniel Dalziel, or order, the sum of Twenty-Six...

Chaiken entered into separate but nearly identical agreements with Strazella and Spitzer to operate a barber shop. Under the terms of the partnership agreements, Chaiken would provide barber chairs,...

Adams checks are imprinted with the words Pay to the order of followed by a blank. Adam fills in an amount on one of the checks and signs it, but he does not write anything in the blank following the...

What would the order of inheritance have been if Ramish had died intestate? In June 2007, Bernard Ramish set up a $48,000 trust fund through West Plains Credit Union to provide tuition for his...

But I intended to pay it all back, I really did, Joseph Swankie said as he talked to his manager. How did I ever get into this situation, he thought. Two years ago, Joe received the promotion for...

THE ETHICAL DIMENSION At one point, United argued that if the Court failed to declare the bankruptcy courts order void, it would encourage dishonest debtors to abuse the Chapter 13 process. How might...

McDonald's Corporation operates the largest fast-food restaurant chain in the United States and the world. It produces such famous foods as the "Big Mac" hamburger, chicken "McNuggets,"the egg...

For each of the following, determine the amount that should be included in gross income: a. Peyton was selected the most valuable player in the Super Bowl. In recognition of this, he was awarded an...

The United Nations has warned that the worldwide growth of e-commerce may constitute a threat to the well-being of the worlds developing nations as well as parts of Europe. Explain the U.N. concerns.

Chris and Sue are 50 percent shareholders in the BackBone personal service corporation. BackBone provides chiropractic services in four small towns: Troy, Union, Vista, and Willow. Chris is the main...

Stan and Susan, two calendar year taxpayers, are starting a new business to manufacture and sell digital circuits. They intend to incorporate the business with $600,000 of their own capital and $2...

Gerhard Schillers was assisting his friend J.L. Loethen in removing a transmission from the bed of the Loethens' truck on the Loethens' property. While Schillers was carrying the transmission down...

Clark, who owned a vacant lot, and Bird, who was engaged in building houses, entered into an oral agreement by which Bird was to erect a house on the lot. Upon the sale of the house and lot, Bird was...

Klinicki and Lundgren, both furloughed Pan Am pilots stationed in West Germany, decided to start their own charter airline company. They formed Berlinair, Inc., a closely held Oregon corporation....

Robert Lehman and Aki Eveline Lehman were married in 1964. They separated in 1971. They became divorced in 1976. At the time of the separation, Aki retained possession of forty three art objects that...

Roberta Santos, age 41, is single and lives at 120 Sanborne Avenue, Springfield, IL 60781. Her Social Security number is 123-45-6789. Roberta has been divorced from her former husband, Wayne, for...

Rubin, was driving on one of the citys streets when he inadvertently obstructed the path of a taxicab, causing the cab to come into contact with his vehicle. Angered by the Rubins sudden blocking of...

Grant is the owner of a relatively old home valued at $45,000. He notices that the bathtubs and fixtures in both bathrooms are leaking and need to be replaced. He contracts with Janes Plumbing to...

What type of trust did Ramish create for the benefit of Covacek? Was it revocable or irrevocable? In June 2007, Bernard Ramish set up a $48,000 trust fund through West Plains Credit Union to provide...

A.D. Lock owned Lock Hospitality, Inc., which in turn owned the Best Western Motel in Conway, Arkansas. Joe Terry and David Stocks were preparing the motel for renovation. As they were removing the...

American Cyanamid shipped 7,000 vials of DPTa vaccine for immunization of infants and children against diphtheria, pertussis, and tetanusfrom its Pearl River, New York, facility to the U.S. Defense...

What is the employment-at-will doctrine? When and why are exceptions to this doctrine made?

John organized Toucan Corporation 10 years ago. He contributed property worth $1 million (basis of $200,000) for 2,000 shares of stock in Toucan (representing 100% ownership). John later gave each of...

Indicate whether the following items are includible in regular taxable income, preadjustment AMTI, and/or ACE. Also indicate whether a corporation must make a positive, negative, or zero adjustment...

Lorenzo owns two apartment buildings. He acquired Forsythia Acres on February 21, 1998, for $300,000 ($90,000 allocated to the land) and Square One on November 12, 2014, for $800,000 ($100,000...

In 2016, Jeremy and Celeste who file a joint return, paid the following amounts for their daughter, Alyssa, to attend the University of Colorado, during academic year 2016-2017. Alyssa was in her...

On January 5, Brian drafts a check for $3,000 drawn on Southern Marine Bank and payable to his assistant, Shanta. Brian puts last years date on the check by mistake. On January 7, before Shanta has...

In 2016, Ginger Graham, age 46 and wife of Greg Graham, engaged in the transactions described below. Determine Ginger's gift tax liability for 2016 if she and Greg elect gift splitting and Greg gave...

Suppose that the note did not state a specific interest rate but instead referred to a statute that established the maximum interest rate for government-guaranteed school loans. Would the note fail...

Arthur Katz testified for the U.S. government in a stock manipulation case. He also pled guilty and testified against three of his law partners in an insurance fraud case. He received a six-month...

George Lu was named the executive director of the Cornell University Foundation, a nonprofit association organized to support the university. As part of its efforts, the foundation has begun a...

If Rohr could have monitored his condition and regimen through a cell phone or other portable Internet connection, would the result in this case likely have been affected? Explain. Diabetes is a...

What If the Facts Were Different? Suppose that Leslie owned a majority of in Polk Plumbing. Could his firing of Dusty and Lezanne still be considered evidence of a breach of fiduciary duty? Explain....

In January 2014, Pelican, Inc., established an allowance for uncollectible accounts (bad debt reserve) of $70,000 on its books and increased the allowance by $120,000 during the year. As a result of...

An employee was hired as a service technician by a telecommunications company to perform unsupervised in-home installations and repairs. On his application, he indicated that he had never been...

Dunn Corporation is not a small corporation exempt from the AMT. Dunns CPA does not calculate the AMT because he knows that Dunns taxable income is less than the $40,000 AMT exemption amount allowed...

A bylaw of Betma Corporation provides that no shareholder can sell his shares unless he first offers them for sale to the corporation or its directors. The bylaw also states that this restriction...

Suppose now that Irene, who is angry with her sister for disclosing her business improprieties, writes a letter to the editor falsely accusing Darla of having sexual relations with her neighbors...

Employee is harassed by a male co-worker, who makes repeated statements to him in the mens locker room such as your hands are so softwhat are you doing after work? and why dont you come strip for me?...

Mazir Coleman had driven a school bus for the Casey County, Kentucky, Board of Education for four years. After that time, Colemans left leg had to be amputated. Coleman was fitted with an artificial...

Why might liabilities be understated if proper adjusting entries are not made at the end of an accounting period?

Doug Boyce works as a claims adjuster for GEICO. He makes $57,000 a year as a base salary plus several thousand more as part of a discretionary annual profit sharing agreement. In 2008 he earned...

In 2014, Company W elected under Section 179 to expense $69,300 of the cost of qualifying property. However, it could deduct only $65,000 of the expense because of the taxable income limitation. In...

Refer to the corporate rate schedule in Appendix C. a. What are the tax liability, the marginal tax rate, and the average tax rate for a corporation with $48,300 taxable income? b. What are the tax...

Firm A exchanged an old asset with a $20,000 tax basis for a new asset with a $32,000 FMV. Under each of the following assumptions, apply the generic rules to compute As realized gain, recognized...

Mr. Lay, who has a 39.6 percent marginal tax rate, earned a $22,030 dividend on his investment in Rexford Mutual Fund. Compute the income tax and the Medicare contribution tax on this dividend if his...

Did the easements relieve AP&L from liability for flooding?

Halleck executed a promissory note payable to the order of Leopold. Halleck did not pay the note when due, and Leopold brought suit on the note, producing it in court. Halleck admitted that he had...

Collins obtained from South Carolina Insurance Co. a liability policy covering a Piper Colt airplane he owned. The policy provided that it did not cover loss sustained while the plane was being...

Rodi was recruited to the defendant law school, which had provisional accreditation, by statements indicating that accreditation would be forthcoming. (However, the school's catalog, which was sent...

How does the WPH approach to ethics respond to an ethical problem?

It is late 2013 and you are a successful oil executive currently working in Alaska for a major oil company. Tomorrow morning you will have the opportunity to negotiate with your employer to receive...

Select a company where you would like to work one day. Using online research, determine if the company has a functional, divisional, matrix, international, team, virtual, or learning organization....

Al, Bob, and Carl form West Corporation and transfer the following items to West: Item Transferred The common stock has voting rights. The preferred stock does not. a. Is the exchange nontaxable...

Alton Newman, age 67, is married and files a joint return with his wife, Clair, age 65. Alton and Clair are both retired, and during 2015, they received Social Security benefits of $10,000. Both...

In 1987, United Parcel Service Co. and United Parcel Service of America, Inc.(together known as UPS), decided to change the parcel delivery business from relying on contract carriers to establishing...

In 2004, Ellen Kruger was boarding a flight from San Francisco to Seattle, on her way home from Australia, when she was struck on the head with a backpack swung by another passenger. During the...

Sasha owes $600 to Yale, who asks Sasha to sign an instrument for the debt. If included on that instrument, which of the following would prevent its negotiabilityI.O.U. $600, I promise to pay $600,...

Did Maida sign the arbitration under economic duress? Amy Maida sued her employer, RLS Legal Solutions, for various claims relating to her job. RLS asked that the case be dismissed because Maida had...

Heather sells land (adjusted basis $75,000; fair market value, $95,000) to a partnership in which she controls an 80% capital interest. The partnership pays her only $50,000 for the land. a. How much...

Charity Bell bought a used Toyota Avalon from Awny Gobran of Gobran Auto Sales, Inc. The odometer showed that the car had been driven 147,000 miles. Bell asked whether it had been in any accidents....

1. But Professor Angevine erased the material. Couldnt you argue that he has a reasonable expectation in deleted material? 2. Under what circumstances would Professor Angevine have had a reasonable...

When Davidson Masonry and Lafayette entered an agreement to work together, what kind of special business form was created? Explain. Marilyn Rowe, decided to submit a bid for a decorative concrete...

Thomas Persson and Jon Nokes founded Smart Inventions, Inc., in 1991 to market household consumer products. The success of their first product, the Smart Mop, continued with later products, which...

As a result of the system audit performed by one of the Big 4 accounting firms at Deming Medical corporate offices, it was discovered that Paula, one of the payroll supervisors, had system access...

Interpret the following citations: a. SENATE FINANCE COMMITTEE, S. REP. No. 2, 97th Cong., 2d Sess. (April 15, 1982). b. LTR 8101067. c. Rev. Proc. 78-172, 1978-2 C.B. 22. d. Lacy v. Comm., 344 F.2d...

Mr. and Mrs. Nester had the followings items of nancial support this year: Social Security benets .. $ 26,890 Dividends and interest . 78,600 Pension from Mr. Nesters former employer . 28,200 Pension...

Jan, a single taxpayer, has adjusted gross income of $250,000, medical expenses of $10,000, home mortgage interest of $3,000, property taxes of $2,000. and miscellaneous itemized deductions of...

On December 30, 2015, Maud sold land to her son, Charles, for $50,000 cash and a 7% installment note for $350,000, payable over 10 years. Maud's cost of the land was $150,000. In October 2017, after...

Mark Hunger was the safety director at Grand Central Sanitation. On September 7, Hunger became aware that hazardous materials consisting of blasting caps were being deposited into garbage containers...