First Niles Financial, Inc. is a company whose sole business is to own and operate a bank, Home Federal Savings and Loan Association of Niles, Ohio. First Niless directors include bank officers...

Sears, Roebuck and Co. promised to give Forrer permanent employment. Forrer sold his farm at a loss to take the job. Shortly after beginning work, he was discharged by Sears, which claimed that the...

1. What is wrong with this surveillance log? 2. Why is it important to take detailed notes during surveillance and covert operations? The following surveillance log was taken during two fixed-point...

After graduating from college with your MBA, you decide to take your grandma's secret cinnamon roll recipe and open up a bakery. You grew up devouring your grandma's rolls, and you have convinced her...

Fleming, Inc., a domestic corporation, operates in both Canada and the United States. This year, the business generated taxable income of $400,000 from foreign sources and $300,000 from U.S. sources....

Tony is a carpenter who owns his own furniture manufacturing business. During the current year, vandals broke into the workshop, damaged several pieces of equipment, stole his delivery truck, and...

Adams orders one thousand widgets at $5 per widget from International Widget to be delivered within sixty days. After the contract is consummated and signed, Adams requests that International deliver...

Twelve accounting and financial services professionals opt to form a limited liability partnership. They have experience in the industry ranging from 15 to 35 years. Edie Fercano has the most...

Ed has supported his stepdaughter, her husband, and their child since his wifes death three years ago. Ed promised his late wife that he would support her daughter from a former marriage and her...

At the Weatherford Hotel in Flagstaff, Arizona, in Room 59, a balcony extends across thirty inches of the rooms only window, leaving a twelve- inch gap with a three- story drop to the concrete below....

Ms. G earned a $91,250 salary, and Mr. H earned a $171,000 salary. Neither individual had any other income and neither can itemize deductions. a. Compute Ms. G and Mr. Hs combined tax if they file as...

Curtis is 50 years old and has an individual retirement account (IRA) that contains substantial funds. His son, Curtis Jr., was accepted to Yale University upon graduating from high school. Curtis...

Penny Stafford, the owner of Belvi Coffee and Tea Exchange, located in Bellevue, Washington, brought an antitrust suit against Starbucks. She alleged that through its exclusive leases, Starbucks bans...

Suppose that Garner had filed his action in an Illinois state court. Could an Illinois state court exercise personal jurisdiction over Foreman or his manager? Why or why not? Stan Garner resides in...

As CEO, both Ullman and Johnson were involved in each of the four management functions. Briefly describe the types of decisions that the CEO of J.C. Penney must make as they relate to each of the...

Jerry Lewinsky was called for jury duty. When voir dire began, Jerry realized that the case involved his supervisor at work. Can Jerry remain as a juror on the case? Why or why not?

Aurora, Colorado, passed an ordinance banning pit bulls and other selected breeds of dogs from being inside the city limits. The American Canine Foundation, an organization aimed at improving the...

During 2015, Gorilla Corporation has net short-term capital gains of $15,000, net long-term capital losses of $105,000, and taxable income from other sources of $460,000. Prior years transactions...

Ken owns and operates a famous candy store and makes most of the candy sold in the store. Business is particularly heavy during the Christmas season. Ken contracts with Sweet, Inc., to purchase ten...

1. At a special meeting, the board of directors of Family Federal Savings & Loan Association asked Newton, its president, manager, and director, to resign. He did so. Shortly thereafter, a reporter...

Joe obtained a box of antique Lenox china dishes that had been left at the Mashpee town dump. He supplemented the sizable but incomplete set of dishes with other Lenox pieces found at antique...

Continue with the results of Problem 37. Determine Rubios income tax expense and GAAP income for the year. In problem Rubio, Inc., an accrual basis C corporation, reports the following amounts for...

John Watson invested $5,000,000 in SmartRead, Inc., a company that was developing an electronic reading device. Within a few months, the $5,000,000 was spent but SmartRead never developed the reading...

Why would the appellate court permit Polyflow to get away with not paying for delivered and presumably merchantable goods?

Green Corporation (a calendar year taxpayer) had a deficit in accumulated E & P of $250,000 at the beginning of the current year. Its net profit for the period January 1 through July 30 was $300,000,...

Using a bad check, B purchased a used automobile from a dealer. B then took the automobile to an auction at which the automobile was sold to a party who had no knowledge of its history. When Bs check...

1. Anderson was seriously injured in a traffic accident. Andersons daughter called a doctor, Lawrence, and told him to give my father the best care you can give him, and Ill pay whatever you charge....

Seaweed Salvagers is a corporation engaged in producing foodstuffs from seaweed. Seaweeds primary salvaging plant is located in California. Because salvaging technology hasnt changed through the...

Sippy was thinking of buying Christichs house. He noticed watermarks on the ceiling, but the agent showing the house stated that the roof had been repaired and was in good condition. Sippy was not...

(Multiple choice) 1. People will often be dishonest if they are placed in an environment of: a. Poor controls. b. High pressure. c. Low integrity. d. Loose accountability. e. All of the above. 2....

Christensen Shipyards built a 155-foot yacht for Tiger Woods at its Vancouver, Washington, facilities. It used Tigers name and photographs relating to the building of the yacht in promotional...

The impact of virtual leadership is likely to grow in the future. As a potential follower in a virtual leadership situation, what issues would be of most concern to you? What would the issues be from...

Are the basic elements of consideration present in the neighbors promise to help John reassemble the garage? Why or why not? John operates a motorcycle repair shop from his home but finds that his...

Margo receives a gift of real estate with an adjusted basis of $175,000 and a fair market value of $100,000. The donor paid gift tax of $15,000 on the transfer. If Margo later sells the property for...

George is the owner of numerous classic automobiles. His intention is to hold the automobiles until they increase in value and then sell them. He rents the automobiles for use in various events...

Tri County Truck & Diesel borrowed $165,000 from Security State Bank and pledged its inventory as security for the loan. In addition, Fred and Randelle Burk agreed to act as sureties for the loan....

Robert was the chief teller in a large New York bank. Over a period of three years, he embezzled $1.5 million. He took the money by manipulating dormant accounts. Unfortunately, Robert was both...

Case Law: In the case of Baldonado v. State, the plaintiff sued the state for false arrest. In Baldonado, a police officer received information from the dispatcher concerning a violent domestic...

Dartmouth College professor M. Eric Johnson, in collaboration with Tiversa, Inc., a company that monitors peer- to- peer networks to provide security services, wrote an article titled Data...

Did the Hyatts accept the list of contract terms included in the computer box? Why or why not? What is the name used for this type of e-contract? Ted and Betty Hyatt live in California, a state that...

A number of years ago, General Motors experienced a $436 million fraud committed by a Long Island automobile dealer. The dealer was borrowing money from General Motors' financing division and using...

Internet giant Zoidle, a U. S. company, generated sales of 2.5 billion in the United Kingdom in 2013 (approximately $ 4 billion in U. S. dollars). Its net profits before taxes on these sales were ...

Oya Paka and two business associates formed a corporation called Paka Corp. for the purpose of selling computer services. Oya, who owned 50 percent of the corporate shares, served as the corporations...

Compare and contrast consolidations, mergers, and conglomerates.

FoldIt, a U.S. business, paid income taxes to Mexico relative to profitable sales of shipping boxes it made in that country. Can it claim a deduction for these taxes in computing U.S. taxable income?...

Jessie borrows $1,000 from Thomas and agrees to repay the money in 30 days. Thomas assigns the right to the $1,000 to Douglas Finance Co. Douglas sues Jessie. Jessie argues that she had agreed to pay...

New England Precision Grinding, Inc. (NEPG), sells precision medical parts in Massachusetts. NEPG agreed to supply Kyphon, Inc., with stylets and nozzles. NEPG contracted with Simply Surgical, LLC,...

Stella bought a cup of coffee at the Roasted Bean Drive-Thru. The coffee had been heated to 190 degrees and consequently had dissolved the inside of the cup. When Stella lifted the lid, the cup...

Bariven, S. A., agreed to buy 26,000 metric tons of powdered milk for $ 123.5 million from Absolute Trading Corp. to be delivered in shipments from China to Venezuela. After the first three...

Grady exchanges qualified property, basis of $12,000 and fair market value of $18,000, for 60% of the stock of Eadie Corporation. The other 40% of the stock is owned by Pedro, who acquired it five...

James L. Skip Deupree, a developer, was building a development of townhouses called Point South in Destin, Florida. All the townhouses in the development were to have individual boat slips. Sam and...

If Beaver did not actually sign the exculpatory clause, could a court conclude that she impliedly accepted its terms by participating in the race? Why or why not? Renee Beaver started racing go-karts...

Pablo is studying financial statements to decide which companies would be wise investments. Pablo identifies Jawanna Corporation as having abnormally high financial ratios compared with other...

The TV show TMZ spoke with Larry Edema from Michigan, who was selected to be in the audience for Oprah's big giveaway: a free trip to Australia. Supposedly, Winfrey had a certified public accountant...

In what ways has shoplifting changed since it was first studied by Cameron?

Roby and James have been married for nine years. Roby sells Plum, Inc. stock that she has owned for four years to James for its fair market value of $180,000. Her adjusted basis is $200,000. a....

Rosa's employer has instituted a flexible benefits program. Rosa will use the plan to pay for her daughter's dental expenses and other medical expenses that are not covered by health insurance. Rosa...

Quail Corporation was created in 2005 through contributions from Kasha ($900,000) and Frank ($100,000). In a transaction qualifying as a reorganization, Quail exchanges all of its assets currently...

Kelly made a written contract to sell certain land to Brown and gave Brown a deed to the land. Thereafter, Kelly sued Brown to get back a 20-foot strip of the land. Kelly claimed that before making...

Belinda spent the last 60 days of 2014 in a nursing home. The cost of the services provided to her was $18,000 ($300 per day). Medicare paid $8,500 toward the cost of her stay. Belinda also received...

Murray Walter, Inc. (Walter, Inc.) was a general contractor for the construction of a waste treatment plant in New Hampshire. Walter, Inc., contracted with H. Johnson Electric, Inc. (Johnson...

Ovate, Inc., earns $140,000 in book income before tax and is subject to a 35% marginal Federal income tax rate. Ovate records a single temporary difference. Warranty expenses deducted for book...

Len Haxton is the owner of a local CPA firm with four separate offices in a medium-size town. He and his wife started the firm 20 years ago, and they now have over 50 full-time employees. Recently,...

1. What fraud symptoms are present in this scenario? 2. Is it possible to know from the information above that Mark is committing fraud at the credit union? 3. What is one reasonable action the...

Ms. B, an unmarried individual, has $196,400 taxable income. Compute her income tax in each of the following cases: a. Ms. B is a single taxpayer. b. Ms. B is a head of household. c. Ms. B is a...

Roland had a taxable estate of $5.5 million when he died this year. Calculate the amount of estate tax due (if any) under the following alternatives. a. Roland's prior taxable gifts consist of a...

Benny sells property (basis of $70,000) to Jet Corporation for $100,000. Based on the following conditions, how could the IRS challenge this transaction? a. Benny is the sole shareholder of Jet...

Henrietta transfers cash of $75,000 and equipment with a fair market value of $25,000 (basis to her as a sole proprietor, $10,000) in exchange for a 40% profit and loss interest worth $100,000. a....

St. George Inc. reported $711,800 net income before tax on this years financial statement prepared in accordance with GAAP. The corporations records reveal the following information: Four years ago,...

Seigel, a seventy-three-year-old man, was injured at one of Giant Foods retail food stores when a bottle of Coca-Cola exploded as he was placing a six-pack of Coke into his shopping cart. The...

If Trent and Xavier had obtained a business process patent on Hallowed, would the release of Halo 2 infringe on their patent? Why or why not? Two computer science majors, Trent and Xavier, have an...

List two authorities held exclusively by the federal government, two held exclusively by the state governments, and two held concurrently.

Angelica is planning to start a home security business in McGehee, Arkansas. She plans to start modestly but hopes to expand her business within 5 years to neighboring towns and, perhaps, within 10...

Frank Frausto delivered newspapers under a renew-able six- month contract called a Delivery Agent Agreement. The agreement identified Frausto as an independent contractor. The company collected...

Clover Corporation is a calendar year taxpayer. Connie owns all of its stock. Her basis in the stock is $10,000. On April 1 of the current (non-leap) year Clover distributes $52,000 to Connie....

Can Jackson delegate her duty to maintain the buildings to Dunn? Why or why not? Who can be held liable for Dunns failure to fix the ceiling, Jackson or Dunn? Was Faught an intended third party...

Fargo Corporation distributes property (basis of $260,000 and fair market value of $310,000) to a shareholder. Fargo Corporation has sufficient E & P for its distributions. What are the tax...

In June 1995, Michael and Debra Boudreaux, doing business as D& J Enterprises, Inc., bought a retail electronics store operated under a franchise from Radio Shack. The Boudreauxes borrowed from...

Mr. and Mrs. Coulter have four dependent children, ages 1, 4, 7, and 11. Mr. Coulters salary was $21,400, Mrs. Coulters wages totaled $16,200, and the couple had no other income or above-the-line...

Raven Corporation owns three machines that it uses in its business. It no longer needs two of these machines and is considering distributing them to its two shareholders as a property dividend. The...

Simba and Zola are married but file separate returns. Simba received $80,000 of salary and $1,200 of taxable dividends on stock he purchased in his name and paid from the salary that he earned since...

While on a fishing trip, Tom Snyder met an elderly couple living in near-destitute conditions in a rural area of Texas. He returned to the area often, and he regularly purchased groceries for the...

Siena Industries (a sole proprietorship) sold three 1231 assets on October 10, 2014. Data on these property dispositions are as follows. a. Determine the amount and the character of the recognized...

The Boo-Ball Corporation receives dividend income of $200,000 from Flew-Ball, a domestic corporation. Boo-Ball owns 70% of Flew-Ball. Boo-Balls net income from operations is $50,000. What is...

1. How did the court treat Dees attempt to establish a prima facie case of employment discrimination? 2. On what did both the trial court and the appellate court focus their analysis? 3. What did the...

William and Maxine Miller were shareholders of Claimsco International, Inc. They filed a suit against the other shareholders, Michael Harris and Kenneth Hoxie, and the accountant who worked for all...

Orange Corporation distributes $200,000 in cash to each of its three shareholders: Sandy, Byron, and Fuchsia Corporation. What factors must be considered when determining how the distribution is...

Mrs. Hess bakes wedding cakes as a hobby and has developed quite a local reputation for excellence. This year, she sold 29 cakes to family and friends for $200 each and spent a total of $1,700 on...

Joe, a resident of New Jersey, wants to open a restaurant. He asks Kay, his friend, an experienced attorney and a New Yorker, for her business and legal advice in exchange for a 20 percent ownership...

Multiple Choice Questions 1. Walters, an individual, received the following in 2016: W-2 income .........................................................................$10,000 Federal tax refund for...

Coppola, who collected coins, joined a coin club, First Coinvestors, Inc. The club would send coins to its members, who were to pay for them or return them within 10 days. What was the nature of the...

Thomas Clements brought an action to recover damages for breach of warranty against defendant Signa Corporation. (A warranty is an obligation that the seller of goods assumes with respect to the...

1. How long is a written stop-payment order effective? What else could RPM have done to prevent this check from being cashed? 2. What would happen if it turned out that RPM did not have a legitimate...

Kristen, the president and sole shareholder of Egret Corporation, has earned a salary bonus of $30,000 for the current year. Because of the lower tax rates on qualifying dividends, Kristen is...

The Forsyth School District contracted with Textor Construction, Inc., to build certain additions and alter school facilities, including the grading of a future softball field. Under the contract,...

Lewis signed a contract for the rights to all timber located on Nine-Mile Mine. He agreed to pay $70 per thousand board feet ($70/mbf). As he began work, Nine-Mile became convinced that Lewis lacked...

Bank of America hired Atlantic Resource Management, LLC, to collect a debt from Michael E. Engler. Atlantic called Englers employer and asked his supervisor about the companys policy concerning the...

At the beginning of the tax year, Barnaby's basis in the BBB Partnership was $50,000, including his $5,000 share of partnership debt. At the end of the tax year, his share of debt was $8,000. His...

Jed acquired 25% of the stock of Alpha (basis of $100,000) 12 years ago, and the other 75% was purchased by Zia (basis of $400,000) three years ago. Alpha enters into a tax-free consolidation with...

When Padgett Properties LLC was formed, Nova contributed land (value of $200,000 and basis of $50,000) and $100,000 cash, and Oscar contributed cash of $300,000. Both partners received a 50% interest...