Tom is the owner of an excavation and trucking firm. Harold owns a garden supply business....
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Tom is the owner of an excavation and trucking firm. Harold owns a garden supply business. When Harold is very busy in the spring of each year, he hires Tom to haul soil, fertilizer and pear and uses one of Tom's front-end loaders to mix this material so that it can be sold as garden soil. Tom receives a contract with a housing developer to haul away 30 loads of soil and dispose of it. Tom signs an agreement with Harold to supply these 30 loads of soil for garden soil mix. The agreement states that Tom and Harold will share the proceeds from the sale of the soil on the basis that the soil provided by Tom represents half the selling price of the garden soil. Harold sells the soil mix without charging HST and pays Tom his share of the proceeds. A tax auditor subsequently decides that HST is applicable to the sale of the soil mix and that HST should have been collected on its sale. Please answer the questions below: a) Are Tom and Harold partners? Why or why not? (3 marks) b) Is Tom liable for HST on his share of the proceeds? Explain briefly. (2 marks) c) If there was an environmental hazard in the soil and one of the customers who purchased the soil mix sued Harold, would Tom be automatically liable to share in the damages paid? (3 marks) d) If the answer to #3 was "no", what would Harold have to do to recover damages from Tom? (2 marks) Tom is the owner of an excavation and trucking firm. Harold owns a garden supply business. When Harold is very busy in the spring of each year, he hires Tom to haul soil, fertilizer and pear and uses one of Tom's front-end loaders to mix this material so that it can be sold as garden soil. Tom receives a contract with a housing developer to haul away 30 loads of soil and dispose of it. Tom signs an agreement with Harold to supply these 30 loads of soil for garden soil mix. The agreement states that Tom and Harold will share the proceeds from the sale of the soil on the basis that the soil provided by Tom represents half the selling price of the garden soil. Harold sells the soil mix without charging HST and pays Tom his share of the proceeds. A tax auditor subsequently decides that HST is applicable to the sale of the soil mix and that HST should have been collected on its sale. Please answer the questions below: a) Are Tom and Harold partners? Why or why not? (3 marks) b) Is Tom liable for HST on his share of the proceeds? Explain briefly. (2 marks) c) If there was an environmental hazard in the soil and one of the customers who purchased the soil mix sued Harold, would Tom be automatically liable to share in the damages paid? (3 marks) d) If the answer to #3 was "no", what would Harold have to do to recover damages from Tom? (2 marks)
Expert Answer:
Answer rating: 100% (QA)
a No Tom and Harold are not partners A partnership is defined as a relationship between persons carrying on business in common with a view to profit P... View the full answer
Related Book For
Federal Taxation 2016 Comprehensive
ISBN: 9780134104379
29th Edition
Authors: Thomas R. Pope, Timothy J. Rupert, Kenneth E. Anderson
Posted Date:
Students also viewed these finance questions
-
Tom Sharkey is the owner of Sharkey Chevy, Buick, GMC. At the start of the year, Tom instituted a customer opinion program to find ways to improve service. The day after the service is performed,...
-
The owner of an on-line video rental service has recorded the following rentals each week: a. Use a 3 week moving average to forecast sales for each of the weeks 4 through 9. b. Use a 4 week moving...
-
The owner of an Italian restaurant has just been notified by her landlord that the monthly lease on the building in which the restaurant operates will increase by 20 percent at the beginning of the...
-
QUESTION 9 The output expression for an AND-OR-Invert circuit having one AND gate with inputs A, B and C and one AND gate with inputs D, E and Fis O(A+B+C)(D+E+F) O (A+B+C)(D+E+F) ABC + DEF...
-
Peyvandi Co., a profit center of California Enterprises, manufactures Product BP3751-9S to sell internally to other company divisions as well as externally. One unit of Product BP3751-9S sells for...
-
A 4.72- g sample of methanol (CH3OH) was placed in an otherwise empty 1.00- L flask and heated to 250oC to vaporize the methanol. Over time the methanol vapor decomposed by the following reaction:...
-
\((3 \times 4)^{3} \div 8+5\) Perform the indicated calculation.
-
The Pharma Biotech Corporation spent several years working on developing a DHA product that can be used to provide a fatty-acid supplement to a variety of food products. DHA stands for...
-
A firm evaluates all of its projects by applying the NPV decision rule. A project under consideration has the following cash flows: Year 0 Cash Flow -$ 28,800 1 12,800 2 3 15,800 11,800 What Is the...
-
Nathan is married with two children and has AGI of $405,000. He also has the following AMT adjustments and preferences: Itemized deductions: medical after floor:$5,375 regular tax taxes: $34,354...
-
A machine purchased three years ago for $ 3 0 4 , 0 0 0 has a current book value using straight - line depreciation of $ 1 8 7 , 0 0 0 ; its operating expenses are $ 3 1 , 0 0 0 per year. A...
-
5.1. What does 'measurement' mean from an accounting perspective? 5.2. Why is accounting measurement potentially controversial?
-
You are considering an investment in Fields and Struthers, Incorporated, and want to evaluate the firm's free cash flow. From the income statement, you see that Fields and Struthers earned an EBIT of...
-
When answering questions five through seven, suppose that instead of agreeing on a fixed contract price, Fluor and Atlantis agreed to the following performance-based schedule: Date of Completion...
-
how to correct this code? def decrypt_a1z26(text: str) -> str: decipher_text = for items in text.split("-"): for char in items.split(" "): if char.isdigit(): pass || || decipher_text += chr(int(char)...
-
MARICALL company uses a standard costing system in connection with the manufacture of their product "X". each unit of finished product contains 2 yards of a direct material. However, a 20% direct...
-
Write pursuasive editorial regarding these questions Why do people conform to perceived norms? What is normative influence, informational influence and descriptive norms, and how do they all play a...
-
Hotel Majestic is interested in estimating fixed and variable costs so that the company can make more accurate projections of costs and profit. The hotel is in a resort area that is particularly busy...
-
Elaine died on May 1, 2015. Her gross estate consisted of the following items: Cash ..$ 40,000 Stocks traded on a stock exchange ..4,200,000 Personal residence 550,000 25% capital interest in a...
-
Jeung Hong, a widower, died in March 2015. His gross estate was $6.5 million and, at the time of his death, he owed debts of $60,000. His will made a bequest of $200,000 to his undergraduate alma...
-
For each of the following cases, indicate the amount of the foreign-earned income exclusion. (Disregard the effect of exemptions for certain allowances under Sec. 912.) a. Sam, a U.S. citizen, is an...
-
Correctly apply the rules for the order of operations to accurately compute \(\left(\frac{5}{7}-\frac{2}{7} ight) \times 2^{3}\).
-
James is mixing soil for a raised garden, in which he plans to grow a variety of vegetables. For the soil to be suitable, he determines that \(\frac{2}{5}\) of the soil can be topsoil, but...
-
Correctly apply the rules for the order of operations to accurately compute \(4+\frac{2}{3} \div\left(\left(\frac{5}{9} ight)^{2}-\left(\frac{2}{3}+5 ight) ight)^{2}\).
Study smarter with the SolutionInn App