Question: What is an insurable interest? When must

> Sara Simon misplaced her Galaxy cell phone in Manhattan, Kansas. Days later, Shawn Vargo contacted her, claiming to have bought the phone from someone else. He promised to mail it to Simon if she would wire $100 to him through a third party, Mark Lawrenc

> Jennifer Koerner adopted a dog—called the Stig—from the Anti-Cruelty Society in Chicago, Illinois, for $95. Koerner wrote a poem and presented it to Kent Nielsen, her live-in boyfriend. In the poem, she expressed her intent to give the Stig to him as a g

> Bob Moreland left his plane at Don Gray’s aircraft repair shop to be painted. When Moreland picked up the airplane, he was disappointed in the quality of the work and pointed out numerous defects. Moreland refused to pay Gray and flew the plane to anothe

> John Wasniewski opened a brokerage account with Quick and Reilly, Inc., in his son James’s name. Twelve years later, when the balance was $52,085, the account was closed, and the funds were transferred to a joint account in the names of John and James’s

> When Deer Valley Resort Co. (DVRC) was developing its ski resort in the Wasatch Mountains near Park City, Utah, it sold parcels of land in the resort village to third parties. Each sales contract reserved the right of approval over the conduct of certain

> Orlando borrows a rototiller from his neighbor, Max. Max has not used the rototiller for two years. Orlando has never owned a rototiller and is not familiar with using one. Max previously used this rototiller often, and if he had made a reasonable inspec

> Curtis is an executive on a business trip to the West Coast. He has driven his car on this trip and checks into the Hotel Ritz. The hotel has a guarded underground parking lot. Curtis gives his car keys to the parking lot attendant but fails to notify th

> Jaspal has a severe heart attack and is taken to the hospital. He is aware that he is not expected to live. Because he is a bachelor with no close relatives nearby, Jaspal gives his car keys to his close friend Friedrich, telling Friedrich that he is exp

> Discuss the standard of care traditionally required of the bailee for the bailed property in each of the following situations, and determine whether the bailee breached that duty. 1. Ricardo borrows Steve’s lawn mower because his own lawn mower needs re

> Portland Shellfish Co. processes live shellfish in Maine. As one of the firm’s two owners, Frank Wetmore held 300 voting and 150 nonvoting shares of the stock. Donna Holden held the other 300 voting shares. Donna’s husband, Jeff, managed the company’s da

> Luis and Maria Rojas contracted to buy a house in Westchester County, New York, from Andrew and Karen Paine. The house was on property designated as “Lot No. 8” on a subdivision map filed in the county clerk’s office. The Paines had acquired the property

> In 2006, twenty- seven parties became limited partners in two hedge funds that had invested with Bernard Madoff and his investment firm. The partners’ investment adviser gave them various investment information, including a memorandum indicating that an

> Jeffery Guerrero hired James McDonald, a certified public accountant, to represent him and his business in an appeal to the Internal Revenue Service. The appeal concerned audits that showed Guerrero owed more taxes. When the appeal failed, McDonald assis

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

> A West Virginia bank ran its asset value from $100 million to $1 billion over seven years by aggressively marketing subprime loans. The Office of the Comptroller of the Currency, a federal regulator, audited the bank and discovered that the books had bee

> John Sheridan owned a Marathon gas station franchise. He sued Marathon Petroleum Co. under Section 1 of the Sherman Act and Section 3 of the Clayton Act, charging it with illegally tying the processing of credit-card sales to the gas station. As a condit

> The accounting firm of Goldman, Walters, Johnson & Co. prepared financial statements for Lucy’s Fashions, Inc. After reviewing the financial statements, Happydays State Bank agreed to loan Lucy’s Fashions $35,000 for expansion. When Lucy’s Fashions decla

> Larkin, Inc., retains Howard Perkins to manage its books and prepare its financial statements. Perkins, a certified public accountant, lives in Indiana and practices there. After twenty years, Perkins has become a bit bored with generally accepted accoun

> ICG Hazard, LLC, operates the Thunder Ridge surface coal mine in Leslie County, Kentucky, under a National Pollutant Discharge Elimination System permit issued by the Kentucky Division of Water (KDOW). As part of the operation, ICG discharges selenium in

> Innovative Marketing, Inc. (IMI), sold “scareware”—computer security software. IMI’s Internet ads redirected consumers to sites where they were told that a scan of their computers had detected dangerous files—viruses, spyware, and “illegal” pornography.

> The U.S. Forest Service (USFS) proposed a travel management plan (TMP) for the Beartooth Ranger District in the Pryor and Absaroka Mountains in the Custer National Forest of southern Montana. The TMP would convert unauthorized user-created routes within

> A by-product of phosphate fertilizer production is pyrite waste, which contains arsenic and lead. From 1884 to 1906, seven phosphate fertilizer plants operated on a forty- three-acre site in Charleston, South Carolina. Planters Fertilizer & Phosphate Co.

> What are three main goals of the Clean Water Act?

> What agencies of the federal government enforce the federal antitrust laws?

> Under what common law theories may professionals be liable to clients?

> What is the main type of activity prohibited by Section 2 of the Sherman Act?

> What law protects consumers against contaminated and misbranded foods and drugs?

> What is a monopoly? What is market power? How do these concepts relate to each other?

> What is the difference between a per stirpes distribution and a per capita distribution of an estate to the grandchildren of the deceased?

> What are the basic requirements for executing a will?

> Bank of America hired Atlantic Resource Management, LLC, to collect a debt from Michael Engler. Atlantic called Engler’s employer and asked his supervisor about the company’s policy concerning the execution of warrants. The caller then told the superviso

> How do courts interpret ambiguities in an insurance policy?

> What are the requirements for acquiring property by adverse possession?

> What are the three elements of a bailment?

> What are the necessary elements for an effective gift?

> Bernie sells his house to Consuela under a warranty deed. Later, Delmira appears, holding a better title to the house than Consuela has. Delmira wants Consuela off the property. What can Consuela do?

> Dave, an accountant, prepares a financial statement for Excel Company, a client, knowing that Excel will use the statement to obtain a loan from First National Bank. Dave makes negligent omissions in the statement that result in a loss to the bank. Can t

> FACTS Bridge Tower Dental, P.A., contracted with Meridian Computer Center, Inc., to develop a computer system for its dental practice. Bridge Tower then paid a computer consultant, Al Colson, to install the system and provide maintenance and support. In

> In early 2016, Bennett, Inc., offered a substantial number of new common shares to the public. Harvey Helms had a long-standing interest in Bennett because his grandfather had once been president of the company. On receiving Bennett’s prospectus, Helms w

> Why might an online executor need a copy of the deceased’s death certificate?

> How might a couple who enjoy purchasing virtual and digital goods together avoid property division issues in the event of a divorce?

> A McDonald’s Happy Meal® consists of an entrée, a small order of French fries, a small drink, and a toy. In the early 1990s, McDonald’s Corp. began to aim its Happy Meal marketing at children aged one to three. In 1995, McDonald’s began making nutritiona

> In June 2015, Bernard Ramish set up a $48,000 trust fund through West Plains Credit Union to provide tuition for his nephew, Nathan Covacek, to attend Tri-State Polytechnic Institute. The trust was established under Ramish’s control and went into effect

> Vern Shoepke bought a two-story home in Roche, Maine. The warranty deed did not specify what covenants would be included in the conveyance. The property was adjacent to a public park that included a popular Frisbee golf course. (Frisbee golf is a sport s

> Vanessa Denai owned forty acres of land in rural Louisiana. On the property were a 1,600-square-foot house and a metal barn. Denai met Lance Finney, who had been seeking a small plot of rural property to rent. After several meetings, Denai invited Finney

> Superior Wholesale Corporation planned to purchase Regal Furniture, Inc., and wished to determine Regal’s net worth. Superior hired Lynette Shuebke, of the accounting firm Shuebke Delgado, to review an audit that had been prepared by Norman Chase, the ac

> Residents of Lake Caliopa, Minnesota, began noticing an unusually high number of lung ailments among the local population. Several concerned citizens pooled their resources and commissioned a study to compare the frequency of these health conditions in L

> The Internet Corporation for Assigned Names and Numbers (ICANN) is a nonprofit entity that organizes Internet domain names. It is governed by a board of directors elected by various groups with commercial interests in the Internet. One of ICANN’s functio

> What are the four essential elements of a trust?

> What are the duties of the landlord and the tenant with respect to the use and maintenance of leased property?

> What is an easement? What are three ways in which an easement can be created?

> Maria Ochoa receives two new credit cards on May 1. She has solicited one of them from Midtown Department Store, and the other arrives unsolicited from High-Flying Airlines. During the month of May, Ochoa makes numerous credit-card purchases from Midtown

> What is the difference between a joint tenancy and a tenancy in common?

> What is a fixture, and how does it relate to real property rights?

> What standard of care applies to common carriers?

> What are the basic duties of a bailee?

> What is real property? What is personal property?

> What crimes might an accountant commit under the Internal Revenue Code?

> How might an accountant violate federal securities laws?

> What are the rules concerning an auditor’s liability to third parties?

> What is contained in an environmental impact statement, and who must file one?

> What are the four major provisions of the Clayton Act, and what types of activities do these provisions prohibit?

> Fruitade, Inc., is a processor of a soft drink called Freshen Up. Fruitade uses returnable bottles, which it cleans with a special acid to allow for further beverage processing. The acid is diluted with water and then allowed to pass into a navigable str

> An agreement that is blatantly and substantially anticompetitive is deemed a per se violation of Section 1 of the Sherman Act. Under what rule is an agreement analyzed if it appears to be anticompetitive but is not a per se violation? In making this anal

> Wiring used by the Appliance Division of Kaufman Manufacturing is currently purchased from outside suppliers at a cost of $25 per unit. However, the same materials are available from the Electronic Division. The Electronic Division has unused capacity an

> Based on the data in Exercise 14-10, assume that management has established a 10% minimum acceptable rate of return for invested assets. a. Determine the residual income for each division. b. Which division has the most residual income? Data from Exerci

> A summary of the time tickets for January is as follows: a. Determine the amounts of factory labor costs transferred to Work in Process and Factory Overhead for January. b. Illustrate the effect on the accounts and financial statements of the factory l

> The operating income and the amount of invested assets in each division of Otte Industries are as follows: a. Compute the return on investment for each division. b. Which division is the most profitable per dollar invested? Operating Income Investe

> The production supervisor of the Machining Department for Lei Company agreed to the following monthly static budget for the upcoming year: The actual amount spent and the actual units produced in the first three months in the Machining Department were

> Fuller Enterprises uses flexible budgets that are based on the following data: Prepare a flexible selling and administrative expenses budget for July for sales volumes of $600,000, $800,000, and $1,000,000. (Use Exhibit 5

> Model 99 Hotels is considering the construction of a new hotel for $80 million. The expected life of the hotel is 20 years with no residual value. The hotel is expected to earn revenues of $15 million per year. Total expenses, including straight-line dep

> On Time Delivery Inc. is considering the purchase of an additional delivery truck for $85,000 on January 1, 20Y4. The truck is expected to have a five-year life with an expected residual value of $8,000 at the end of five years. The expected additional rev

> The following data are accumulated by Wocester Hat Company in evaluating the purchase of $250,000 of equipment, having a four-year useful life with no residual value. a. Assuming that the desired rate of return is 10%, determine the net present value f

> Bliss Beauty Products is considering an investment in one of two new product lines. The investment required for either product line is $2,800,000. The net cash flows associated with each product are shown below. a. Recommend a product of

> Wyoming Woodworks is evaluating two capital investment proposals for a retail outlet store, each requiring an investment of $1,000,000 and each with a five-year life and expected total net cash flows of $1,250,000. Location 1 is expected to provide equal a

> Daffodil Inc. is planning to invest in manufacturing equipment to make a new garden tool. The new garden tool is expected to generate additional annual sales of 120,000 units at $9 each. The new manufacturing equipment will cost $320,000, have a 10-year

> Arrowhead Inc. is considering an investment in new equipment that will be used to manufacture a mobile communications product. The product is expected to generate additional annual sales of 24,000 units at $400 per unit. The equipment has a cost of $27,0

> Buscho Industries is considering one of two investment options. Option 1 is a $45,000 investment in new blending equipment that is expected to produce equal annual cash flows of $18,000 for each of eight years. Option 2 is a $17,000 investment in a new co

> Aquarius Games Inc. has finished a new video game, Triathlon Challenge. Management is now considering its marketing strategies. The following information is available: Anticipated sales price per unit ……………………………………………… $75 Variable cost per unit* ………………

> Healey Development Company has two competing projects: an office building and a condominium complex. Both projects have an initial investment of $2,000,000. The net cash flows estimated for the two projects are as follows:

> Fire proofing Solutions Inc. is considering the purchase of automated machinery that is expected to have a useful life of eight years and no residual value. The average rate of return on the average investment has been computed to be 15%, and the cash pay

> Sager Industries is considering an investment in equipment that will replace direct labor. The equipment has a cost of $1,200,000 with a $300,000 residual value and a 10-year life. The equipment will replace three employees who has an average total wages

> Wisconsin Healthcare Corp. is proposing to spend $3,810,000 on a project that has estimated net cash flows of $620,000 for each of the 10 years. a. Compute the net present value, using a rate of return of 12%. Use the table of present values of an annuity

> Strahn Foods Inc. is considering two possible investments: a delivery truck or a bagging machine. The delivery truck would cost $65,970 and could be used to deliver an additional 90,000 bags of taquitos chips per year. Each bag of chips can be sold for a

> The Canyons Resort, a Utah ski resort, announced a $400 million expansion of lodging properties, lifts, and terrain. Assume that this investment is estimated to produce $79.7 million in equal annual cash flows for each of the ï¬&#

> The plant manager of Jurassic Industries is considering the purchase of new automated assembly equipment. The new equipment will cost $2,375,000. The manager believes that the new investment will result in direct labor savings of $500,000 per year for 10

> Southwest Transportation Inc. is considering a distribution facility at a cost of $10,000,000. The facility has an estimated life of 10 years and a $2,000,000 residual value. It is expected to provide yearly net cash flows of $2,500,000. The company’s min

> Ball Sports Inc. is considering an investment in one of two machines. The stitching machine will increase productivity from sewing 300 baseballs per hour to stitching 360 per hour. The contribution margin is $0.30 per baseball. Assume that any increased

> Montana Grill has computed the net present value for capital expenditures for the Billings and Great Falls locations using the net present value method. Relevant data related to the computation are as follows: a. Determine the present value index for

> “Every airline has what is called a break-even load factor. That is, the percentage of seats the airline (flies) that it must sell to cover its costs. Since revenue and costs vary from one airline to another, so does the break-even f actor. . . . Overall,

> Carnival Corporation has recently placed into service some of the largest cruise ships in the world. One of these ships can hold up to 3,600 passengers and cost $750 million to build. Assume the following additional information: • There will be 300 cruis

> Osborne Excavation Company is planning an investment of $315,000 for a bulldozer. The bulldozer is expected to operate for 1,850 hours per year for five years. Customers will be charged $140 per hour for bulldozer work. The bulldozer operator costs $37 pe

> The following data are accumulated by McDermott Motors Inc. evaluating two competing capital investment proposals: Determine the expected average rate of return for each proposal. Testing Equipment Diagnostic Software $150,000 5 years $5,000 Amount

> On-Demand Sports Co. operates two divisions—the Action Sports Division and the Team Sports Division. The following income and expense accounts were provided as of November 30, 20Y1, the end of the current fiscal year, after all adjustments, including thos

> Panda Airlines Inc. has two divisions organized as profit centers, the Passenger Division and the Cargo Division. The following divisional income statements were prepared: The service department charge rate for the service department cos

> Power Sports Company has two divisions, Wholesale and Retail, and two corporate service departments, Tech Support and Accounts Payable. The corporate expenses for the year ended December 31, 20Y7, are as follows: Tech Support Department â€&br

> Harris Corporation, a manufacturer of electronics and communications systems, uses a service department charge system to charge profit centers with Computing and Communications Services (CCS) service department costs. The following table i

> Millennium Printers Inc. manufactures color laser printers. Model L-1819 presently sells for $200 and has a total product cost of $160, as follows: Direct materials …………………………… $ 40 Direct labor …………………………………… 80 Factory overhead …………………………. 40 Total

> Toyota Motor Corporation (TM) uses target costing. Assume that Toyota marketing personnel estimate that the competitive, average selling price for the Rav4 in the upcoming model year will need to be $25,000. Assume further that the Rav4’s total unit cost

> Based on the data presented in Exercise 12-15, assume that Willis Products Inc. uses the variable cost concept of applying the cost-plus approach to product pricing. a. Determine the variable costs and the cost amount per unit for the production and sale