Fraud Examination
6th Edition
ISBN: 9781337619677
Author: Albrecht, W. Steve, Chad O., Conan C., Zimbelman, Mark F.
Publisher: Cengage,
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Case, Part 1: Velma, a 59-year-old minority woman who works as a teacher, contacts you about getting a loan to purchase a condominium. As you’re chatting, she indicates that she’s hoping to retire from teaching in three years. You take her financial and personal information and see that you should be able to get her the amount she needs to purchase the home, and now you need to discuss terms. You share some loan options with her and she insists that she’s only interested in an adjustable rate mortgage, because she wants the lower monthly payments to start and is convinced the interest rates will stay low or go down even further.
1. What should you share with Velma about an ARM loan given her situation? Are you obligated to help her apply for the loan she wants?
Case 3 Khalid is the owner of many buildings and hotels. Since he was a minor, his mother was his legally appointed guardian. Khalid convinced Musallam and Musallam gave him loan of 10,000 OMR with 12% interest. The loan was taken by way of mortgaging one of his property. Musallam gave 5000 OMR as advance, Khalid's mother informed Musallam that anybody who would get into an agreement with him would do so at his own risk. After knowing this, Musallam wants to get the advance he has given. Questions a. Is Khalid bound to give the money back to Musallam? Why or why not? b. Is the contract in this case enforceable by law? Explain why or why not?
LO.3 On Thursday, Justin flies from Baltimore (where the office for his sole proprietorship is located) to Cadiz (Spain). He conducts business on Friday and Tuesday; vacations on Saturday, Sunday, and Monday (a legal holiday in Spain); and returns to Baltimore on Thursday. Justin was scheduled to return home on Wednesday, but all flights were canceled due to bad weather. As a result, he spent Wednesday watching floor shows at a local casino.
For tax purposes, what portion of Justin’s trip is regarded as being for business?
Suppose Monday was not a legal holiday. Would this change your answer to part (a)? Explain.
Under either part (a) or (b), how much of Justin’s airfare qualifies as a deductible business expense?
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