The Tax Shelters case deals with:
A. Ignoring the recording of lottery gains in a client's tax return
B. Whether to sell tax shelter products to members of the audit firm
C. Changing culture in the tax department of a CPA firm
D. Pressure from one's superior to manipulate financial statements
Answer: C
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To record a stock dividend of 30%, debit Stock Dividends for the par value of the shares distributed
Indicate whether the statement is true or false
The local convenience store makes personal sized pizzas. Currently, its process makes complete pizzas, fully cooked, for the customer. This process has a fixed cost of $20,000, and a variable cost of $1.75 per pizza
The owner is considering a different process that can make pizzas in two ways: completely cooked (as before), or partially cooked and then flash frozen for the customer to finish heating at home. This alternate process has a fixed cost of $24,000, but a lower variable cost (because much less energy is used in baking) of $1.25 per pizza. a. What is the crossover point between the existing process and the proposed process? b. If the owner expects to sell 9,000 pizzas, should he get the new oven?
Which of the following is true of goodwill?
A) Goodwill must be capitalized when acquired and amortized over seven years or less. B) Both created and acquired goodwill must be recorded in the books. C) Goodwill must be expensed when acquired. D) Goodwill is not amortized.
Cargo Carrier Company files a suit against Distribution & Transport Inc (D&T). Before the case goes to trial, they enter into a settlement agreement that includes a confidentiality clause. Cargo announces its satisfaction with the terms to its employees. Elron, an employee, posts comments about the terms on Twitter. On discovering the posts, D&T asks a court to invalidate the agreement. Most
likely, the court will hold that the agreement is a. no longer enforceable because Cargo breached it. b. enforceable because Elron is not a direct party to it. c. enforceable because Elron's's posts are outside the agreement. d. enforceable because Cargo did not criticize the agreement.