Brick of Brick and Stone Partnership was involved in a motor vehicle accident and died January 1, 2017. Stone asked for your professional consultation on the business as a going concern. What would your consultation to Mr. Stone be?
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Brick of Brick and Stone
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- Brick met in a motor vehicle accident and died January 1, 2017. Stone asked for your professional consultation on the business as a going concern. What would your consultation to Mr. Stone be?Mary Ribukh was hired as a staff auditor of LGY and Company in 2005. In December 2012, he transferred to Quilava and Associates. In 2014, he returned back to LGY and Company until his retirement in 2020 at the age of 55. Question 1: Are the retirement benefits taxable to Anton? Question 2: Suppose he was terminated from employment due to dishonesty. Is the separation pay taxable to Anton? Question 3: Suppose he was terminated from employment due to the merger of the two audit firms Will the separation pay be taxable to Anton? Yes, Yes, Yes No, Yes No No Yes, Yes Yes, No, NoAmar Jain purchased a second hand car in December 2010, which was insured by New India Assurance by the previous owner. Jain did not inform the insurance company about the registration transfer or get the insurance policy transferred to his name. When Jain filed a claim on the car being stolen in March 2011, his claim was rejected on the grounds that the claim was not in his name.1) Explain whether insurance company rightly rejected the claim?2) Can Jain file a complaint if claim is rejected. If yes, where? What will be final decision?
- On Nov. 5, 2016, a Fudge Corp. truck was in an accident with an auto driven by Paul. Fudge received notice on January 15, 2017 of a lawsuit for P 700,000 damages for personal injuries suffered by Paul . The entity's counsel believed it is probable that Paul will be awarded an estimated amount in the range between P 200,000 and P 450,000 and no amount is a better estimate of potential liability than any other amount because each point in the range is as likely as any other. The 2016 financial statements were issued on March 1, 2017. What amount of loss should be accrued on Dec. 31, 2016?e. After a wedding in 2018, ten people died, possibly as a result of food poisoning from products sold by Ziem Catering Services. Legal proceedings have commenced, seeking damages from Ziem Catering Services but it disputes liability. Up to the date of approval of the financial statements for the year to 31 December 2018, Ziem Catering Services’ lawyers advised that it is probable that it will not be found liable. However, when Ziem Catering Services prepares the financial statements for the year to 31 December 2019, its lawyers advice that, owing to developments in the case, it is probable that it will be found liable.Required:In accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets, what is the required accounting treatment?i.At 31 December 2018?ii.At 31 December 2019?ohn Smith, age 31, is single and has no dependents. At the beginning of 2014, Johnstarted his own excavation business and named it Earth Movers. John lives at 1045 Cen-ter Street, Lindon, UT, and his business is located at 381 State Street, Lindon, UT. TheZIP Code for both addresses is 84042. John�s Social Security number is 111-11-1111, andthe business identification number is 11-1111111. John is a cash basis taxpayer.During 2014, John reports the following items in connection with his business.Fee income for services rendered $460,000Building rental expense 36,000Office furniture and equipment rental expense 9,000Office supplies 2,500Utilities 4,000Salary for secretary 34,000Salary for equipment operators 42,000Payroll taxes 7,000Fuel and oil for the equipment 21,000 Purchase of three new front-end loaders on January 15, 2014, for $550,000. 550,000Purchase of a new dump truck on January 18, 2014 80,000 During 2014, John recorded the following additional items.Interest income from…
- During the year to 31 December 2019, a customer started legal proceedings against TCI Food company, claiming that one of the food products that it manufactures had caused several members of his family to become seriously ill. The company’s lawyers have advised that this action will probably not succeed. Should the company disclose this in its financial statements according to IAS 37?On January 1st, 2018, Dr. Marcie Cousins established Health-Wise Medical, a medical practice organized as a proprietorship. The following conversation occurred the following August between Dr. Cousins and a former medical school classmate, Dr. Avi Abu, at an American Medical Association convention in Seattle. Dr. Abu: Marcie, good to see you again. Why didn't you call when you were in Miami? We could have had dinner together. Dr. Marcie Cousins: Actually, I never made it to Miami this year. My husband and kids went up to our Vail condo twice, but I got stuck in Jacksonville. I opened a new consulting practice this January and haven't had any time for myself since. Dr. Abu: I hear about it....Health....something....right? Dr. Marcie Cousins: Yes, Health-Wise Medical. My husband chose the name. Dr. Abu: I've thought about doing something like that. Are you making money? I mean, is it worth your time? Dr. Marcie Cousins: You wouldn't believe it. I started by opening a bank…Jensen is the sole owner and operator of a small embroidering firm called “Stitch This” which designs and creates promotional goods for other businesses and sports teams. “Stitch This” has three employees who work under Jensen’s direction. Jensen is concerned that if he were to become disabled and unable to work for a period of time, not only would he lose his income, but his business may not be able to survive considering the ongoing operating expenses. Which of the following insurance policies would BEST address the needs of “Stitch This”?
- In the early part of 2018, the partners of Hugh, Jacobs, and Thomas sought assistance from a local accountant. They had begun a new business in 2017 but had never used an accountant’s services. Hugh and Jacobs began the partnership by contributing $150,000 and $100,000 in cash, respectively. Hugh was to work occasionally at the business, and Jacobs was to be employed full-time. They decided that year-end profits and losses should be assigned as follows: Each partner was to be allocated 10 percent interest computed on the beginning capital balances for the period. A compensation allowance of $5,000 was to go to Hugh with a $25,000 amount assigned to Jacobs. Any remaining income would be split on a 4:6 basis to Hugh and Jacobs, respectively. In 2017, revenues totaled $175,000, and expenses were $146,000 (not including the partners’ compensation allowance). Hugh withdrew cash of $9,000 during the year, and Jacobs took out $14,000. In addition, the business paid $7,500 for repairs…After a wedding in 2018, ten people died, possibly as a result of food poisoning from products sold by Ziem Catering Services. Legal proceedings have commenced, seeking damages from Ziem Catering Services but it disputes liability. Up to the date of approval of the financial statements for the year to 31 December 2018, Ziem Catering Services’ lawyers advised that it is probable that it will not be found liable.However, when Ziem Catering Services prepares the financial statements for the year to 31 December 2019, its lawyers advice that, owing to developments in the case, it is probable that it will be found liable. Required:In accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets, what is the required accounting treatment?i. At 31 December 2018?ii. At 31 December 2019?After a wedding in 2018, ten people died, possibly as a result of food poisoning fromproducts sold by Lambon Catering Services. Legal proceedings have commenced, seekingdamages from Lambon Catering Services but it disputes liability. Up to the date of approvalof the financial statements for the year to 31 December 2018, Lambon Catering Services’lawyers advised that it is probable that it will not be found liable. However, when LambonCatering Services prepares the financial statements for the year to 31 December 2019, itslawyers advice that, owing to developments in the case, it is probable that it will be foundliable. Required:In accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets, what is therequired accounting treatment?i. At 31 December 2018?ii. At 31 December 2019?