The Public Company Accounting Oversight Board (PCAOB) was created as part of a series of accounting reforms in the Sarbanes-Oxley Act of 2002. The PCAOB is a governmentally created entity with expansive powers to regulate the entire accounting industry. Every accounting firm that audits public companies under the securities laws must register with the PCAOB, pay it an annual fee, and comply with its rules and oversight. The PCAOB may inspect registered firms, initiate formal investigations, and issue severe sanctions in its disciplinary proceedings. Although the Securities and Exchange Commission (SEC) appoints PCAOB members and has oversight of the PCAOB, it cannot remove PCAOB members at will, but only “for good cause shown,” and “in accordance with” specified procedures. The SEC Commissioners, in turn, cannot themselves be removed by the President except for “inefficiency, neglect of duty, or malfeasance in office.” Parties with standing have challenged in a U.S. District Court the constitutionality of the Sarbanes-Oxley Act’s creation of the PCAOB because it conferred executive power on PCAOB members without subjecting them to presidential control. What should the court decide? Explain.
> Lavon Phillips became engaged to marry Sarah Grendahl and moved in with her. Sarah’s mother, Mary, became suspicious that Phillips was not telling the truth about his past, particularly about whether he was an attorney and where he had worked. She also w
> The Federal Trade Commission (FTC) ordered Warner-Lambert to cease and desist from advertising that its product, Listerine antiseptic mouthwash, prevents, cures, or alleviates the common cold and sore throats. The order further required Warner-Lambert to
> Carolinian is a closely held, manager-managed limited liability company organized under the laws of South Carolina. Carolinian owns and manages various hotel and rental properties in South Carolina. In February 2018, the Levys obtained a judgment against
> Namvar Taghipour, Danesh Rahemi, and Edgar Jerez formed a limited liability company to purchase and develop a parcel of real estate. The LLC’s articles of organization designated Jerez as the LLC’s manager. In addition, the written operating agreement am
> In January, Dr. Vidricksen contributed $250,000 to become a limited partner in a Chevrolet car agency business with Thom, the general partner. Articles of limited partnership were drawn up, but no effort was made to comply with the State's statutory requ
> Llexcyiss Omega and D. Dale York, both residents of Indiana, jointly listed a Porsche automobile for sale on eBay, a popular auction website. The listing stated that the vehicle was located in Indiana and that the winning bidder would be responsible for
> Ed O’Bannon, a highly talented former basketball player at UCLA, alleges an antitrust violation based on the premise that current and former NCAA men’s basketball and Division I-A football players should be allowed to sell the rights to their name, image
> In 1923, DuPont was granted the exclusive right to make and sell cellophane in North America. In 1927, the company introduced a moisture-proof brand of cellophane that was ideal for various wrapping needs. Although more expensive than most competing wrap
> The National Collegiate Athletic Association (NCAA) adopted a plan for televising college football games to reduce the adverse effect of television coverage on spectator attendance. The plan limited the total number of televised intercollegiate football
> Bernard L. Bilski and Rand A. Warsaw sought patent protection for a claimed invention that explains how buyers and sellers of commodities in the energy market can protect, or hedge, against the risk of price changes. Claim 1 describes a series of steps i
> Robert Marrama filed a voluntary bankruptcy petition under Chapter 7. In the filing, Marrama made a number of statements about his principal asset, a house in Maine, which were misleading or inaccurate. He reported that he was the sole beneficiary of the
> Krieger is a 53-year-old woman who has not held a job in more than twenty-five years. Prior to that period, she did not earn more than $12,000 a year in her working career. Krieger is living with her mother, age seventy-five, in a rural community where f
> A landlord owned several residential properties, one of which was subject to a local rent control ordinance. The local rent control administrator determined that the landlord had been charging rents above the levels permitted by the ordinance and ordered
> On December 17, ZZZZ Best Co., Inc. (the debtor) borrowed $7 million from Union Bank (the bank). On July 8 of the following year, the debtor filed a voluntary petition for bankruptcy under Chapter 7. During the preceding ninety days, the debtor had made
> Yolanda Christophe filed a bankruptcy petition under Chapter 13. Her scheduled debts consist of $11,100 of secured debt, $9,300 owed on an unsecured student loan, and $6,960 of other unsecured debt. Christophe asserts that the student loan is nondischarg
> David files a bankruptcy petition under Chapter 13. After the claims of secured and priority creditors have been satisfied, David’s remaining bankruptcy estate has a value of $100,000. David’s creditors with allowed unsecured claims are owed $250,000 in
> Eddie Lee Howard and Shane D. Schneider worked for Nitro-Lift Technologies LLC. As a condition of employment, they entered into confidentiality and noncompetition agreements that contained a clause requiring any dispute between Nitro-Lift and its employe
> Freelin Conn filed a voluntary petition under Chapter 7 of the Bankruptcy Code on September 30, 2021. Conn listed BancOhio National Bank as having a claim incurred in October 2020 in the amount of $4,000 secured by an eight-year-old automobile. The car i
> Landmark at Plaza Park, Ltd., filed a plan of reorganization under Chapter 11 of the Bankruptcy Code. Land- mark is a limited partnership whose only substantial asset is a two-hundred-unit garden apartment complex. City Federal holds the first mortgage o
> In July 2020, Edward Slater purchased a new Galaxy boat primarily for personal purposes. To finance the purchase, Slater obtained a loan from Howell State Bank, agreeing to repay the loan in ninety-six monthly installments of $151.41. The Galaxy boat was
> Standridge purchased a Chevrolet automobile from Billy Deavers, an agent of Walker Motor Company. According to the sales contract, the balance due after the trade-in allowance was $282.50, to be paid in twelve weekly installments. Standridge claims that
> New West Fruit Corporation (New West) and Coastal Berry Corporation are both brokers of fresh strawberries. In the second half of 2019, New West’s predecessor, Monc’s Consolidated Produce, Inc., loaned money and strawberry plants to a group of strawberry
> Elizabeth Tilleraas received three student loans totaling $3,500 under the Federal Insured Student Loan Program (FISLP) of the Higher Education Act. These loans were secured by three promissory notes executed in favour of Dakota National Bank & Trust Co.
> National Acceptance Company loaned Ultra Precision Industries $692,000 and to secure repayment of the loan Ultra executed a chattel mortgage security agreement on National’s behalf on March 7, 2015. National perfected the security interest by timely fili
> National Cash Register Company (NCR), a manufacturer of cash registers, entered into a sales contract for a cash register with Edmund Carroll. On November 18, Firestone and Company made a loan to Carroll, who conveyed certain property to Firestone as col
> McLoon, Morse Bros., and T-M Oil Companies were closely held companies entirely owned by members of the Pescosolido family, under the leadership of Carl Pescosolido, Sr. His sons, Carl Jr. and Richard, each held shares in McLoon, Morse Bros., and T-M. To
> Ray fell from a defective ladder while working for his employer. Ray brought suit in strict tort liability against the Alad Corporation (Alad II), which neither manufactured nor sold the ladder to Ray’s employer. Prior to the accident, Alad II succeeded
> Raymond Johnson snatched a purse that had been left in an unattended car at a gas station. The purse contained both money and a firearm. Johnson was convicted for the crimes of grand theft of property (cash and payroll check) and grand theft of a firearm
> The Brazilian Equity Fund, Inc., is a nondiversified, publicly traded, closed-end investment company incorporated under the laws of Maryland. As a closed-end fund, it has a fixed number of outstanding shares, so that investors who wish to acquire shares
> Horton owned one hundred twelve shares of common stock in Compaq Computer Corporation , a Delaware corporation. Horton and seventy-eight other parties sued Compaq, fifteen of its advisers, and certain management personnel, alleging that Compaq and its co
> Pritchard & Baird was a reinsurance broker. A reinsurance broker arranges contracts between insurance companies so that companies that have sold large policies may sell participations in these policies to other companies in order to share the risks. Char
> In addition to a class of common stock, Peabody Coal Company had outstanding a class of cumulative 5 percent preferred shares with a par value of $25 with the following contractual rights as stated in the corporation’s articles of incorporation: Preferen
> GM Sub Corporation (GM Sub), a subsidiary of Grand Metropolitan Limited, acquired all outstanding shares of Liggett Group, Inc., a Delaware corporation. Rothschild International Corporation (Rothschild) was the owner of 650 shares of the 7 percent cumula
> International Distributing Export Company (I.D.E.) was organized as a corporation on September 7, 2014, under the laws of New York and commenced business on November 1, 2014. I.D.E. formerly had been in existence as a sole proprietorship. On October 31,
> Harold Lang Jewelers, Inc. (Lang), a Florida corporation, through its single employee, had sold and consigned merchandise to jewelry stores in western North Carolina for almost thirty years. Lang’s employee came frequently to North Carolina for the purpo
> Berger was planning to produce a fashion show in Las Vegas. In April 1965, Berger entered into a written licensing agreement with CBS Films, Inc., a wholly owned subsidiary of CBS, for presentation of the show. In 1966, Stewart Cowley decided to produce
> Horizon is a large, publicly traded provider of both nursing homes and management for nursing homes. It wanted to expand into Osceola County, Florida. South- ern Oaks was already operating in Osceola County; it owned the Southern Oaks Health Care Center
> Anderson and Tallstrom are partners in Rancho Murieta Investors (RMI). Anderson owns 80 percent of RMI; Tallstrom owns the other 20 percent and is the managing partner of RMI. Hellman obtained judgments against Anderson in his individual capacity for mor
> Present and former law review editors who were researching disciplinary systems and procedures at the military service academies for an article requested, but were denied, access to case summaries of honor and ethics hearings maintained in the U.S. Air F
> Michael, his mother, and his four siblings orally agreed that they would all play the lottery and that if any one of them should purchase a winning lottery ticket, all of them would share the money equally. Michael’s mother purchased the sole winning tic
> For a period of sixteen months, Great Lakes Higher Education Corp. (Great Lakes), a not-for-profit student loan servicer, issued 224 student loan checks totaling $273,152.88. The checks were drawn against Great Lakes’ account at First Wisconsin National
> Tally held a savings account with American Security Bank. On seven occasions, Tally’s personal secretary, who received his bank statements and had custody of his passbook, forged Tally’s name on withdrawal slips that she then presented to the bank. The s
> Morvarid Kashanchi and her sister, Firoyeh Paydar, held a savings account with Texas Commerce Medical Bank. An unauthorized withdrawal of $4,900 from the account was allegedly made by means of a telephone conversation between some other unidentified indi
> On Tuesday, June 11, Siniscalchi issued a $200 check on the drawee, Valley Bank. On Saturday morning, June 15, the check was cashed. This transaction, as well as others taking place on that Saturday morning, was not recorded or processed through the bank
> Laboratory Management deposited into its account at Pulaski Bank a check issued by Fairway Farms in the amount of $150,000. The date of deposit was February 5. Pulaski, the depositary bank, initiated the collection process immediately by forwarding the c
> Vincent Medina signed a check in the amount of $34,348 written on the account of First Delta Financial, a family corporation owned and controlled by Medina. His corporate title did not appear before his signature. He issued the check to James G. Wyche. T
> Attorney Eliot Disner tendered a check for $100,100 to Sidney and Lynne Cohen. In drawing the check, Disner was serving as an intermediary for his clients, Irvin and Dorothea Kipnes, who owed the money to the Cohens as part of a settlement agreement. The
> On August 10, 2019, Theta Electronic Laboratories, Inc., executed a promissory note to George and Marguerite Thomson. Three other individuals, Gerald Exten, Emil O’Neil, James Hane, and their wives also indorsed the note. The note was then transferred to
> R&A Concrete Contractors, Inc., executed a promissory note that identifies both R&A Concrete and Grover Roberts as its makers. On the reverse side of the note, the following appears: “X John Ament Sec. & Treas.” National Bank of Georgia, the payee, now s
> In 1942, Congress passed the Emergency Price Control Act in the interest of national defense and security. The stated purpose of the Act was “to stabilize prices and to prevent speculative, unwarranted and abnormal increases in prices and rents.” The Act
> What amount would a person with actual cash value (ACV) coverage receive for two-year-old furniture destroyed by a fire? The furniture would cost $2,000 to replace today and had an estimated life of five years. (LO8.2)
> Most home insurance policies cover jewelry for $2,000 and silverware for $5,000 unless items are covered with additional insurance. If $9,000 worth of jewelry and $12,000 worth of silverware were stolen from a family, what amount of the claim would not b
> What was the gift tax in 2019?
> You have $100,000 in your retirement fund that is earning 5.5 percent per year, compounded quarterly. How many dollars in withdrawals per month would reduce this nest egg to zero in 20 years? How many dollars per month can you withdraw for as long as y
> Gene and Dixie, husband and wife (ages 35 and 32), both work. They have an adjusted gross income of $95,000 in 2020, and they are filing a joint income tax return. Both have an employer-provided retirement plan at work. What is the maximum IRA contrib
> Ruby is 25 and has a good job at a biotechnology company. She currently has $10,000 in an IRA, an important part of her retirement nest egg. She believes her IRA will grow at an annual rate of 8 percent, and she plans to leave it untouched until she reti
> Using Exhibit 14-3, calculate approximately how much money the older (age 65-74) household from Problem 4 spends on medical care. (LO 14.1)
> Calculate approximately how much money an older (age 65-74) household with an annual income of $45,000 spends on housing each year. (Hint: Use Exhibit 14-3) (LO 14.1)
> Ted Riley owns a Lexus worth $40,000. He owns a home worth $275,000. He has a checking account with $800 in it and a savings account with $1,900 in it. He has a mutual fund worth $110,000. His personal assets are worth $90,000. He still owes $25,000 on h
> Prepare your net worth statement using the assets - liabilities = net worth equation. (LO 14.1)
> Currently, the economy is beginning to slowdown and there is talk that there may be a recession in the near future. Referring to Exhibit 12-3, what types of stock would you suggest for Jamie and Ross to invest in considering their life stage and current
> Joe and Rachel are both retired. Married for 55 years, they have amassed an estate worth $4.4 million. The couple has no trust or other type of tax-sheltered assets. If Joe or Rachel died in 2020, how much federal estate tax would the surviving spouse
> What is the total of estate removed from Barry and Mary's estate in 2020?
> How much money can Barry and Mary gift to their grandchildren in 2020 without any gift tax liability?
> How much money can they gift to their children in 2020 without any gift tax liability?
> In 2020, you gave a $15,000 gift to a friend. What was the gift tax in 2020? (LO 14.4)
> What will be the gift tax in 2020?
> What is the total amount removed from Joshua’s estate in 2020?
> Shelly's assets include money in checking and saving accounts, investments in stocks and mutual funds, personal property, such as furniture, appliances, an automobile, coin collection and jewelry. Shelly calculates that her total assets are $165,200. H
> Using the "nonworking" spouse method, what should be the life insurance needs for a family whose youngest child is 5 years old? (LO10.1)
> Using the "nonworking" spouse method, what should be the life insurance needs for a family whose youngest child is ten years old? (LO10.1)
> Jamie Lee’s father suggested that they purchase stock in a company that he has held shares in for decades. They want to take advantage of the stock tip, but Jamie Lee and Ross are trying to decide between purchasing the company’s common stock and prefer
> You are a dual income, no-kids family. You and your spouse have the following debts (total): mortgage, $200,000; auto loan, $10,000; credit card balance, $4,000; and other debts of $10,000. Further, you estimate that your funeral will cost $8,000. You
> Mark and Parveen are the parents of three young children. Mark is a store manager in a local supermarket. His gross salary is $75,000 per year. Parveen is a full time stay-at-home mom. Use the easy method to estimate the family's life insurance needs
> Use Exhibit 10-1 to find the average number of additional years a 25-year-old male and female are expected to live, based on the statistics gathered by the U.S. government as of 2017 (LO10.1)
> Use the Figure It Out worksheet in this chapter to calculate your own life insurance needs. (LO10.1)
> Shaan and Anita are married and have two children, ages 4 and 7. Anita is a “nonworking” spouse who devotes all of her time to household activities. Estimate how much life insurance Shaan and Anita should carry. (LO10.1)
> You and your spouse are in good health and have reasonably secure careers. Each of you makes about $55,000 annually. You own a condominium with an $120,000 mortgage, and you owe $15,000 on car loans, $5,000 on personal debts, and $4,000 on credit card
> Shelly’s variable annuity has a mortality and expense risk charge at an annual rate of 1.25 percent of account value. Her account value during the year is $50,000. What was Shelly’s mortality and expense risk charge for the year? (LO10.4)
> Sophia purchased a variable annuity contract with a $25,000 purchase payment. Surrender charges begin with 7 percent in the first year, and decline by 1 percent each year. In addition, Sophia can withdraw 10 percent of her contract value each year with
> Your variable annuity charges administrative fees at an annual rate of 0.15 percent of account value. Your average account value during the year is $200,000. What is the administrative fee for the year? (LO10.4)
> You are the wage earner in a “typical family,” with $58,000 gross annual income. Use the easy method to determine how much insurance you should carry. (LO10.1)
> What are the advantages and disadvantages of investing in a technology company’s IPO? Will they be guaranteed a large return from this investment? At this life stage would you recommend that Jamie Lee and Ross invest in an IPO? Why or why not?
> In 2007, Joelle spent $5,000 on her health care. If this amount increased by 6 percent per year, what would be the amount Joelle spent in 2017 for the same health care? (Hint: Use the Time Value of Money Table in Chapter 1 Appendix, Exhibit 1-A) (LO9.
> If Ronald selects the POS plan, what will his annual medical costs be? (LO9.2)
> What total costs will Ronald pay if he enrolls in the HMO plan? (LO9.2)
> What annual medical costs will Ronald pay using the sample medical expenses provided if he enrolled in the Blue Cross/Blue Shield plan? (LO9.2)
> Stephanie was injured in a car accident and rushed to the emergency room. She received stitches for a facial wound and treatment for a broken finger. Under Stephanie’s PPO plan, emergency room care at a network hospital is 80 percent covered after the
> Georgia, a widow, has a take-home pay of $1,200 a week. Her disability insurance coverage replaces 70 percent of her earnings after a four-week waiting period. What amount would she receive in disability benefits if an illness kept Georgia off work for
> Becky’s comprehensive major medical health insurance plan at work has a deductible of $750. The policy pays 85 percent of any amount above the deductible. While on a hiking trip, she contracted a rare bacterial disease. Her medical costs for treatment, i
> A health insurance policy pays 65 percent of physical therapy cost after a $200 deductible. In contrast, an HMO charges $15 per visit for physical therapy. How much would a person save with the HMO if he or she had 10 physical therapy sessions costing $5
> In 2012, per capita spending on health care in the United States was about $9,000. If this amount increased by 7 percent a year, what would be the amount of per capita spending for health care in 8 years? (Hint: Use the Time Value of Money Table in th
> The Tucker family has health insurance coverage that pays 80 percent of out-of-hospital expenses after a $1,000 deductible per person. If one family member has doctor and prescription medication expenses of $2,200, what amount would the insurance pay? (L
> Jamie Lee and Ross agree that by accomplishing their short goals, they can budget $7,000 a year towards their long-term investment goals. They are estimating that with the allocations recommended by their financial advisor, they will see an average of 7
> Shaan and Anita currently insure their cars with separate companies, paying $650 and $575 a year. If they insure both cars with the same company, they would save 10 percent on the annual premiums. What would be the future value of the annual savings o
> In the preceding example, assuming their insurance rates remain the same, how many years will it take Dave and Ellen to earn back in discounts the cost of the deadbolts? (LO8.2)
> Dave and Ellen are newly married and living in their first house. The yearly premium on their homeowner’s insurance policy is $450 for the coverage they need. Their insurance company offers a 5% discount if they install deadbolt locks on all exterior doo
> When Carolina's house burned down, she lost household items worth a total of $50,000. Her house was insured for $160,000 and her homeowners' policy provided coverage for personal belongings up to 55 percent of the insured value of the house. Calculate h
> Karen and Mike currently insure their cars with separate companies paying $700 and $900 a year. If they insure both cars with the same company, they would save 10 percent on the annual premiums. What would be the future value of the annual savings over t
> Kurt Simmons has 50/100/15 auto insurance coverage. One evening he lost control of his vehicle hitting a parked car and damaging a store front along the street. Damage to the parked car was $5,400 and damage to the store was $12,650. What amount will the
