A gasoline-powered lawn mower that had been used earlier to cut grass was left unattended next to a water heater that had been manufactured by Sears. Expert testimony was presented to demonstrate...

In 1969 a deed for land in Pitt County was executed and delivered by Joel and Louisa Tyson unto M. H. Jackson and wife Maggie Jackson, for and during the term of their natural lives and after their...

Mirage Investments Corp. (MIC) planned a tender offer for the shares of Gulf States International Corp. (GSIC). Archer, an officer of MIC, placed purchase orders for GSIC stock through the New York...

Koh, a California resident, won a judgment in California of $240,000 against Inno-Pacific, a Singapore company, but Inno-Pacific did not pay the judgment. Koh discovered that the company had an...

If Bad Frog had sought to use the label to market toys instead of beer, would the courts ruling likely have been the same? Explain your answer. FACTS Bad Frog Brewery, Inc., makes and sells alcoholic...

Soon after Teresa DeYoungs husband died, her mother-in-law also died, leaving an inheritance of more than $400,000 for DeYoungs children. DeYoung hired John Ruggerio, an attorney, to ensure that her...

For the last three years, Lucy and Marvin each have owned 50 of the 100 outstanding shares of Lucky Corporation stock. Lucy transfers property having an $8,000 basis and a $12,000 FMV to Lucky for an...

In 2016, Phoenix Corporation acquires a new research facility and hires several scientists to develop new products. No new products are developed until 2017, although the following expenditures were...

Frosty Land Foods shipped a load of beef from its plant in Montgomery, Alabama, to Scott Meat Co. in Los Angeles via Refrigerated Transport Co. (RTC), a common carrier. Early Wednesday morning,...

Bruce Albea contracting, Inc., was the general contractor on a state highway project. Albea subcontracted the asphalt work to APAC-Southeast, Inc. Their contact prohibited any delegation without...

Howard Gartman is a 40% partner in the Horton & Gartman Partnership. During 2013, the partnership reported the total items below (100%) on its Form 1065: Ordinary income...

Continue with the facts presented in Problem 33. At the end of the first year, the LLC distributes $100,000 cash to Sam. No distribution is made to Drew. In Problem Sam and Drew are equal partners in...

What are the tax consequences for the transferor and transferee when property is transferred to a newly created corporation in an exchange qualifying as nontaxable under Sec. 351?

On May 1, Lincoln lends Donaldson $200,000 and receives from Donaldson his agreement to pay this amount in two years and takes a security interest in the machinery and equipment in Donaldsons...

Bertram writes a check for $200 payable to cash. He puts the check in his pocket and drives to the bank to cash the check. As he gets out of his car in the banks parking lot, the check slips out of...

Four GRRLs Partnership is owned by four friends. Lacy holds a 40% interest; each of the others owns 20%. Lacy sells investment property to the partnership for its fair market value of $200,000. Her...

Suppose you are a high-level employee of Drugstore.Com. You currently hold 50,000 NQOs, each with an exercise price of $20. The options vestthat is, you are no longer restricted from exercising...

Sophias Glam Designs needs to hire 100 new workers to manufacture a new line of back-to- school outfits. The company received hundreds of applications for the positions. Simone, Sophias Glam Designs...

For the previous question, find a quota that would have equivalent effects to the $5 tariff. Show the effects, numerically and diagrammatically, on Home and Foreign welfare (a) under the assumption...

In the current year, DYL Corporation earned taxable and tax-exempt interest from the following investments. Investment Interest Income 10-year municipal bond (issued in 2009)...

Tonya, who lives in California, inherited a $100,000 State of California bond in 2015. Her marginal Federal tax rate is 35%, and her marginal state tax rate is 5%. The California bond pays 3.3%...

Josephine Rutyna was a 60-year-old widow who suffered from high blood pressure and epilepsy. A bill collector from Collections Accounts Terminal, Inc. called her and demanded that she pay $56 she...

A farmer made a contract in April to sell to a grain dealer forty thousand bushels of corn to be delivered in October. On June 3, the farmer unequivocally informed the grain dealer that he was not...

Professional Products, Inc. (PPI), bought three pallets of computer wafers from Omneon Video Graphics. (A computer wafer is a thin, round slice of silicon from which microchips are made.) Omneon...

Was the federal government wise to bail out General Motors, or should GM have been left to face the force of the market and the decisions of the Chapter 11 bankruptcy judge? General Motors, in 2009,...

The Perfection Produce Company entered into a written contract with Hiram Hodges for the purchase of three hundred tons of potatoes to be grown on Hodges farm in Maine at a stipulated price per ton....

Do Internet service providers (ISPs) have an ethical duty to advise their users if the information that the users provide for distribution through the ISPs might violate the law? Explain.

Under what doctrine discussed in the chapter might John seek to recover the profits he lost when he declined to do repair work for one week? John operates a motorcycle repair shop from his home but...

On May 1, Sikora goes into Carsons retail clothing store to purchase a suit. Sikora finds a suit he likes for $190 and buys it. The suit needs alterations. Sikora is to pick up the altered suit at...

Roger Bannister was the director of technical and product development for Bemis Co. He signed a covenant not to compete that prohibited him from working for a conflicting organization for eighteen...

The client's husband attacked her so severely that she was hospitalized. They are now separated, and the client wants to sue her husband. The husband still lives on the military base where they lived...

Your supervising attorney asks you to locate the digest topic and key numbers for the Glover v.Lockheed Corp. case listing. He remembers it is a Federal Supplement case, but he cannot remember the...

At the time of her death, Monica held the following assets. Fair Market Value Personal residence (title listed as Monica and Peter, tenants by the entirety with right of survivorship) $900,000...

Glacier Smokeries has been an S corporation since its inception six years ago. On January 1 of the current year, the corporations two equal shareholders, Adam and Rodney, had adjusted bases of...

John Wasniewski opened a brokerage account with Quick and Reilly, Inc., in his son Jamess name. Twelve years later, when the balance was $52,085, the account was closed, and the funds were...

George and Mona Antanuos obtained a mortgage loan secured with rental property from the First National Bank of Arizona. At the closing, they received from the bank a Notice of Right to Cancel,...

Indicate whether the following book-tax differences produce deferred tax assets, deferred tax liabilities, or neither. Consider each item independently. a. Book depreciation in excess of tax...

Clear Corporation sells portable water filtration systems by means of the Internet and direct mail orders. Most of the components are purchased from foreign suppliers at a cost of $1,200. Clear...

Trusty Corporation has a single class of common stock outstanding. Jim owns 200 shares, which he purchased for $50 per share two years ago. On April 10 of the current year, Trusty distributes to its...

Jane contributes valuable property to a partnership in exchange for a general partnership interest. The partnership also assumes the recourse mortgage Jane incurred when she purchased the property...

All Steel Pipe and Tube is a closely held corporation engaged in the business of selling steel pipes and tubes. Leo and Scott Callier are its two equal shareholders. Scott, Leos uncle, is one of the...

If a product competes mainly with the products of major foreign companies, is resale price maintenance more or less likely to lessen competition and restrict output than if the competitors were all...

In 1994, Daniel Scoggin hired Broward Marine for $5,000 to perform a "bottom job" on his 77-foot sailboat, the "Jubilem." A "bottom job" is a final paint job involving sandblasting the hull to the...

After the unauthorized release and posting of classified U. S. government documents to WikiLeaks.org, allegedly involving Bradley Manning, a U. S. Army private first class, the U. S. government began...

Monica Sexton filed a petition for Chapter 13 reorganization. One of her creditors was Friedmans Jewelers. Her petition misclassified Friedmans claim as $ 800 of unsecured debt. Within days,...

Mantor began working for Circuit City in August 1992. When Circuit City hired Mantor, it had no arbitration program. In 1995, Circuit City instituted an arbitration program called the "Associate...

Crane is a partner in the Cardinal Partnership. A dispute arose with the partnership regarding his share of current earnings. The partnership contends that the amount is $75,000, while Crane believes...

1. Thomas Hoenig, a member of the board of directors of the Federal Deposit Insurance Corporation, observed: Americans realize that more must be done to address a threat that remains increasingly a...

General Corporation owns equipment which cost $70,000 and has a $44,000 adjusted basis. General exchanges the equipment for other equipment ($42,000 FMV) and marketable securities ($30,000 FMV)....

Mariana Deutsch worked as a knitwear mender and attended a school for beauticians. The sink in her apartment collapsed on her foot, fracturing her big toe and making it painful for her to stand. She...

Alpha Corporation generates taxable income of $100,000 per year. Beta Corporation generates taxable income of $75,000 per year. a. Calculate regular income tax liability for Alpha and Beta. b. How...

Mr. Lion, who is in the 39.6 percent tax bracket, is the sole shareholder of Toto, which manufactures greeting cards. Totos average annual net profit (before deduction of Mr. Lions salary) is...

The boards of directors of DuMont Corp. and Epsot, Inc., agreed to enter into a friendly merger, with DuMont to be the surviving entity. The stock of both corporations was listed on a national stock...

Suppose that Everett McCleskey, a local businessperson, is a good friend of Al Miller, the owner of a local candy store. Every day on his lunch hour, McCleskey goes into Millers candy store and...

Assuming that the clerk had required a cosigner based on Sages race or gender, what act prohibits such credit discrimination? Leota Sage saw a local motorcycle dealers newspaper advertisement for a...

Claude is a CPA and a partner with SKH and Associates, a regional public accounting firm. In September 2009, Brokaw Technologies approached one of his clients, Walter Fenner, about acquiring 100...

This year Saluda Hills Inc., has QPAI of $940,000 and taxable income of $980,000. Because Saluda Hills outsources much of its work to independent contractors, its W2 wage base that relates entirely...

In 2010, the Ryan Corporation sold a capital asset and incurred a $40,000 LTCL that was carried forward to subsequent years. That sale was the only sale of a capital asset that Ryan made until 2015,...

Carla incorporated her sole proprietorship by transferring inventory, a building, and land to the corporation in return for 100 percent of the corporation's stock. The property transferred to the...

Richard Meyer and two friends from law school recently formed Meyer and Associates as a limited liability partnership (LLP). Income from the partnership will be split equally among the partners. The...

Are air-quality regulations typically overseen by federal, state, or local governments? In the late 1980s, residents of Lake Caliopa, Minnesota, began noticing an unusually high number of lung...

Below is an extract from Cisco Systems 2012 Annual Report. What is the firms GAAP effective tax rate? Why does it differ from the top statutory tax rate? What are deferred taxes? What are the major...

In 1972, Donald and Joyce Carnahan purchased a 1-acre lot located on a 22-acre lake. The purchase included a portion of the lake bed. The Carnahans used the lake for recreational activity in both...

Wylie receives cash of $145,000 in liquidation of his partnership interest, in which he has a basis of $110,000. The partnership owns no hot assets. After following all of the classification...

Assume the same facts as in Problem 6-40 except, on January 2 of the current year, Gamma Corporation sells all property other than cash to Acquiring Corporation for FMV. Gamma pays off the accounts...

Rebecca Nichols drove a truck for Tri-National Logistics, Inc. (TNI). On a delivery trip, Nichols's fellow driver, James Paris, made unwelcome sexual advances. Paris continued to make advances during...

Walters, a grower of Christmas trees, contracted to supply Traynor with "top-quality trees." When the shipment arrived and was inspected, Traynor discovered that some of the trees were not top...

Which official publication(s) contain(s) the following? a. Transcripts of Senate floor debates b. IRS announcements c. Tax Court regular opinions d. Treasury decisions e. U.S. district court opinions...

Tyrone and Akira, who are married, incurred and paid the following amounts of interest during 2016: Home acquisition debt interest .................$15,000 Credit card interest...

With regard to signature liability, which provision of the Uniform Commercial Code (UCC) discussed in this chapter applies to this scenario? Nancy Mahar was the office manager at Golden Years Nursing...

Your boss knows that you are taking a fraud examination course at a local university. He is interested in learning more about data-driven fraud detection and asks you to prepare a short memo briefly...

Gunther, an industry leader in computer technology, established early the industry standard for computer compatibility. As a part of its computer manufacturing, Gunther decides to issue a seal of...

Investors formed Peach Corporation in Year 1. Its current E&P (or current E&P deficit) and distributions for Years 1 through 4 are as follows: What is Peachs accumulated E&P at the beginning of Years...

John and Joe Brower worked for a large construction company but set up their own company, Crest Ridge. They were awarded a subcontract on a job to provide wall panels. They wanted to use panels made...

Jorge, Marta, and Jocelyn are college graduates, and Jorge has come up with an idea for a new product that he believes could make the three of them very rich. His idea is to manufacture soft-drink...

1. What federal statute(s) could apply to this case? Explain. 2. Citing the RCRA cradle-to-grave procedure, do you think Wal-Mart was contributory in violation of the statute? Why or why not?

The board of directors of Orange Corporation, a calendar year taxpayer, is holding its year-end meeting on December 30, 2015. One topic on the boards agenda is the approval of a $25,000 gift to a...

The Wallen family owned a cabin on Lummi Island in the state of Washington. A driveway ran from the cabin across their property to South Nugent Road. Floyd Massey bought the adjacent lot and built a...

Chefik Simo, an 18-year-old freshman on the varsity soccer team at Furman University, was a passenger in a 2000 Mitsubishi P45 Montero Sport, a sport-utility vehicle designed, manufactured, and sold...

1. If the pursuing patron were actually an off duty employee of Chilis, how would that impact your agency analysis? 2. When the pursuing patron called the Chilis employee with a description of the...

Refer to the income tax rate structure in the preceding problem. Company K incurs a $22,000 deductible expense. Compute the current year tax savings from the deduction assuming that: a. Company Ks...

Five-year-old Cheyenne Stark was riding in the backseat of her parents' Ford Taurus. Cheyenne was not sitting in a booster seat. Instead, she was using a seatbelt designed by Ford, but was wearing...

On September 1, Jennings, a used car dealer, wrote a letter to Wheeler, stating, I have a 1955 Thunderbird convertible in mint condition that I will sell you for $13,500 at any time before October 9....

Victoria Berridge, Robert Cook, Robert Walsh, and the pilot, Scott Cowan, boarded a Twin Otter airplane for a skydiving expedition. Shortly after takeoff, the right engine failed, and the airplane...

Lance H. and Wanda B. Dean are married and live at 431 Yucca Drive, Santa Fe, NM 87501. Lance works for the convention bureau of the local Chamber of Commerce, while Wanda is employed part-time as a...

Debra Agis was a waitress in a restaurant owned by the Howard Johnson Company. On May 23, Roger Dionne, manager of the restaurant, called a meeting of all waitresses at which he informed them that...

THE ETHICAL DIMENSION Could Morales-Cruzs dean have had legitimate reasons for changing his mind about the one-year extension? If so, what might they have been? THE LEGAL ENVIRONMENT DIMENSION What...

Federal antitrust statutes are complex, but the basic goal is straightforward: to prevent a major industry from being so dominated by a small group of corporations that they destroy competition and...

Initiate, Inc., a 501(c)(3) organization, receives the following revenues and incurs the following expenses. Grant from Gates Foundation $ 70,000 Charitable contributions received .. 625,000...

Klutz won a contest sponsored by a radio station, entitling him to play in a twilight golf tournament. He went to the radio station and signed a form releasing the station from any liability...

For 2016, Silver Corporation (a calendar year business) incurred the following transactions: Taxable income...................................................................... $3,950,000...

Charles and L. W. Clement were brothers who had formed a partnership that lasted forty years until Charles discovered that his brother, who kept the partnerships books, had made several substantial...

Based upon the following facts of Fred, Inc., calculate adjusted current earnings (ACE): Alternative minimum taxable income (AMTI) ....... $7,220,000 Municipal bond interest ................ 630,000...

Company XYZ manufactures a tangible product and sells the product at wholesale. In its first year of operations, XYZ manufactured 1,000 units of product and incurred $200,000 direct material cost and...

Rhonda has an adjusted basis and an at-risk amount of $7,500 in a passive activity at the beginning of the year. She also has a suspended passive activity loss of $1,500 carried over from the prior...

Emerald Motors is an automobile dealer. The controller consults with you about the type of accounting used for a special offer to its new car customers. Emerald has offered to provide at no charge to...

When Theodore Staats went to his companys Council of Honor Convention, he was accompanied by a woman who was not his wife, although he told everyone she was. The company fired him. Has Staatss...

In the warranty deed that was used in the property transfer from the Brusters to Shoepke, what covenants would be inferred by most courts? Vern Shoepke purchased a two-story home from Walter and...

Linda Filasky held policies issued by Preferred Risk Mutual Insurance Co. Following an injury in an automobile accident and storm damage to the roof of her home, Filasky sustained loss of income,...

Jordan Motors, Inc. opens a dealership in Frankfurt, West Germany, selling American cars. In its advertising campaign, Jordan claims that for the next two weeks only, it will beat the price on any...