Chapter 20, Problem 1SBD

Bonnie and Clyde jointly own their own home when Clyde defaults on credit card debt. To determine if Clyde is insolvent, how will the home play into the calculation?

If you were to invite investors to your business, who would they be and why? What are the possible sources of financing for your business venture?

You are going to be a partner of your friend in a real estate business. How will you do it?

Angela and Agatha are partners in Double A Partners. When they withdraw cash for personal use, how should that be recorded in the accounting records?

An internet investment club asks Jose, a successful stockbroker, to advise its members. The club allows Jose to set up an account with a brokerage firm and gives Jose control of the account, but does not authorize Jose to withdraw funds for his own benefit. Jose, however, uses the money in the account to repay personal loans. He intends to return the money at some point in the future. Jose is charged with embezzlement. Is Jose guilty of embezzlement? Why or why not?

Give an argument in favor of taxes on wealth like the estate tax. What potential problems would there be in trying to enforce a new wealth tax on living individuals?