Under the constructive receipt doctrine, Reg.1.451-2, the payment is considered income for the current year because the earnings were under the restriction of a successful verdict for your client, and so the payment could not be considered as earned any earlier. Since the company operates as an LLC, all income passes through the owner as ordinary income, after business exclusions and deductions, IRC Code Sec.752. And so, the earnings from will be subject to self-employment tax, FICA, and Medicare tax. 1B. How is the $25,000 treated for purposes of federal tax income?
On March 3, 1995 Dr. Vernon Robertshaw leased a Fluoroscan imaging machine from Fluoroscan Imaging Systems Inc. of Northbrook, Illinois. Dr. Vernon Robertshaw paid a deposit of $1,579.52 U.S and was to pay monthly rental of $686.75 U.S for 60 months. The said machine was unique and it was designed to produce continuous images. Unfortunately machine did not work and plaintiff returned it to defendant for repair three times during the first year. Defendant was unable to correct the defects of that machine and he assigned the lease to Trans Leasing International that company bought out by General Electrical Capital Corporation.
The book basis of the transferred equipment was $6 million, and the equipment was recently appraised for $6.5 million. The fair value of the investment in Theta is $5.5 million as reasonably determined. Acer has a significant influence over Theta, but does not control financial interest in Theta. Under U.S. and international standards the appropriate accounting for this transaction is for the investment under Acer Corp to be accounted for using the equity method in the consolidated financial statements, or under the fair value option for US headquartered companies only. The FASB ASC 845-10-30 provides guidance for certain nonmonetary exchanges in which one entity transfers nonfinancial assets to a second entity in exchange for a noncontrolling ownership interest in that second entity.
4 points A more recent issue that is causing major problems in the business community is Answer a. the privatization of ownership. b. short-term versus long-term financial goals of management. c. ethical problems d. environmental concerns. Corporate ethics policies typically apply to ________ in dealing with ________. Answer a. employee actions; customers and creditors b. employee actions; customers, vendors, and regulators c. management actions; all corporate constituents d. employee actions; all corporate constituents On its 2010 balance sheet, Barngrover Books showed $510 million of retained earnings, and exactly that same amount was shown the following year.
Unfortunately in this case the customer Data Equipment Systems is unable to receive shipment until January 11, 2011 due to a lack of available warehouse space (Mintz & Morris, 2011). Reed needs to have that revenue recorded on the 2010 end-of-year financial report. Potential legal and ethical issues Reed is considering booking the $1.2 million sale in the December 2010 books and on December 30 approaches controller Marty Fuller to discuss the dilemma. Fuller explains the accounting rules about sales held for future delivery, although Reed understands the rules he
96 were that audit documentation be sufficient for an experienced auditor to understand. Several guidelines stated that auditors could not (a) use oral explanations alone to support their work or conclusions, (b) must provide new guidance for determining the date of the auditor’s report, (c) establish a time limit of 60 days for assembling the audit team, and (d) establish a minimum period for retaining the audit documentation (Lynford, Gretchem, Ahern & Whittinton, 2006). Analyze the fraud risk factors presented during the 2000 Nextcard audit and how each should have impacted the audit procedures. Although NextCard executives realized early there were huge flaws in the business process created by NextCard’s CFO Jeremy Lent, executives and upper management continue to set in motion Lent vision of making NextCard the world’s number one credit card distributer. The first fraud risk presented in this case study was the incentive and pressure faced by Jeremy Lent and some of his top executives of obtaining a goal of one million credit card customers
In 2001, the United States faced its biggest financial market fraud scandal by the worldwide known corporation Enron. The top management was found guilty for using accounting loopholes to overstate revenues and stock price. The discovery of the Enron scandal lead to the exposure of several more corporate fraud cases from more well-known companies including WorldCom. This decreased the confidence in our markets and question the adequacy of the United States disclosure practices and the reliability in the required independent audits. Consequently, the biggest accounting legislation was passed known as The Sarbanes-Oxley Act of 2002.
Chapter 2 2-15: B. A is part of role of internal auditor because they can assist external auditors with annual financial statement audit. C& D also belong to internal auditors because they are often involved in assurance and consulting engagements for their entity. However, B cannot belongs to the role of internal auditors because it does not relate to the investors and creditors. , 2-16: A.
Network Security:Security Breach Paper NTC/411 U.S. Department Of Veterans Affairs In 2011, the Department of Veterans Affairs was having trouble with one of the hard drives in a database RAID array. So, naturally, the agency sent the drive out for repair. Unfortunately, it neglected to erase the unencrypted data on the disc. When the contractor was unable to repair the disc, they simply recycled it -- again without erasing. Also that same month 8 hard drives were determined stolen from a safe within the last 15 months, also two laptops were stolen-- leaving the personal information for some 26 to100 million veterans accessible to whoever next got the hard drives.
Recently, the Government had implemented Consultancy Service Tendering where the consultants would be required to prepare the Technical and Financial Report. The Technical report would include the methodology, approach and designs for the project. The information provided and obtained would generally not sufficient. Based on engineering judgement to my best knowledge, any possible negative effects due to the project would need to be highlighted. It is the engineer obligation to report honestly and professionally even it may cause my employer to lose in the bidding.