Chapter 7, Problem 3SC

During the current year, Paul, the vice president of a bank, made gifts in the following amounts: To Sarah (Paul's personal assistant) at Christmas $36 To Darryl (a key client)—$3 was for gift wrapping 53 To Darryl's wife (a homemaker) on her birthday 20 To Veronica (Paul's boss) at Christmas 30 In addition, on professional assistants' day, Paul takes Sarah to lunch at a cost of $82. Presuming that Paul has adequate substantiation and is not reimbursed, how much can he deduct? Do not round intermediate computations. If required, round your final answer to the nearest cent.

Week 5Leon Jones worked in the warehouse of a large building supply company. One day he unexpected left for Fiji, never to return. His supervisor seized the opportunity to continue submit time cards for Leon to the payroll department. Each week, as part of his normal duties, the supervisor received the employee pay cheques from payroll and distribute them to the workers on his shift. As Leon was not present to collect his pay cheque, the supervisor forged Leon’s name and cashed it.

John Smith worked in the stockyard of a large building supply company. One day he unexpectedly left for California, never to return. His foreman seized the opportunity to continue to submit time cards for John to the payroll department. Each week, as part of his normal duties, the foreman received the employee paychecks from payroll and distributed them to the workers on his shift. Because John was not present to collect his paycheck, the foreman forged John’s name and cashed it.Describe two control techniques to prevent or detect this fraud scheme.

Check My Work A small air conditioning repair and parts supply company employs 25 workmen who perform services tasks and 3 office staff: One of the office staff, Harold Jones, has been with the company since it opened its doors. During that time, he has earned the trust of the owner and has proven to be a diligent employee who often works late, occasionally comes in on weekend for no additional pay, and hasn’t taken a substantial vacation in over 10 years. Instead, he staggers his vacation days throughout the year to avoid the need for a replacement and ensuring that none of the other office staff is burdened with his work. Harold’s primary tasks include: Responsible for POS cash and credit sales Bills those customers who purchase on credit Opens the mail and posts cash receipts to AR records, and Prepares the daily cash deposits for the business. Another office worker, Mike Larkin, handles purchasing of inventory and supplies from vendors, stocking, shipping merchandise,…

Michelle operates several food trucks. Indicate the amount (if any) that she can deduct as an ordinary and necessary business deduction in each of the following situations. Note: Leave no answers blank. Enter zero if applicable. a. Michelle moves her food truck between various locations on a daily rotation. Last week, Michelle was stopped for speeding. She paid a fine of $160 for speeding, including $115 for legal advice in connection with the ticket. b. Michelle paid $785 to reserve a parking place for her food truck for the fall football season outside the local football stadium. Michelle also paid $130 for tickets to a game for her children. c. Michelle provided a candidate with free advertising painted on her truck during the candidate's campaign for city council. Michelle paid $640 to have the ad prepared and an additional $340 to have the ad removed from the truck after the candidate lost the election. d. Michelle realized a $1,235 loss when she sold one of her food trucks to her…

Madam Lorraine’s daughter Maame Efua has just completed Senior High School and due to the Covid 19 pandemic that led to the closure of universities, she has been helping with record keeping at her mother’s convenient mini Mart. Maame Efua took responsibility of recording her mother’s purchases of goods from suppliers (both on credit and cash basis) and also issues receipts to customers when they buy goods. The policy of the shop is cash sales only. Prior to Maame Efua assisting her mom, Mr. Fred, an accountant used to visit the shop two days after the end of the month to check Madam Lorraine’s purchase invoices, bank deposits, cash at hand, etc in order to prepare the financial records for the month for a small fee. He also assists with records to be sent to the tax authorities and make the necessary payments. Having now been conversant with the amount of sales per day and the month, and also recording all the purchases, Efua believes she is able to determine how much profit her mother…