Brady Dumais owns a small restaurant that operates on a cash-only basis; no credit cards are...

Brady Dumais owns a small restaurant that operates on a cash-only basis; no credit cards are accepted. Brady has taken a bookkeeping course and a tax preparation course. With the help of his spouse, he is able to perform all the bookkeeping duties and prepare his tax returns.

Brady discovers that federal and state income taxes take away 35 percent of his profits. Because his is a cash business, Brady has started the practice of “skimming” sales. Because these sales will not appear in the business records, they will escape taxation, and Brady will be able to retain 100 percent of these revenue dollars.

In your initial post:

Identify the stakeholders in this case.
Comment on the legal and ethical issues involved in skimming.
If you were aware of this activity on your business, how would you address it?

Expert Solution

ekkarill92 answered 2 years ago

Mr. Leo Supreme owns a pizza restaurant. He is currently operating on a takeaway basis only....

Mr. Leo Supreme owns a pizza restaurant. He is currently operating on a takeaway basis only. He has several employees working in the kitchen and delivering pizzas. He also owns various assets, including a rental property. Luigi is Leo’s head chef and he is provided with the use of a Toyota RAV4 motor car as well as his salary of $100,000 per year. The car was purchased by Leo on 1 April 2018 for $55,000. Leo has not made the...

Jansen, a single taxpayer, owns and operates a restaurant (as a sole proprietorship). The business is...

Jansen, a single taxpayer, owns and operates a restaurant (as a sole proprietorship). The business is not a specified services business. In 2020, the business pays $125,000 in W-2 wages, has $187,500 of qualified property, and $437,700 in net income (all of which is qualified business income). Jansen has no other items of income or loss and will take the standard deduction. What is Jansen’s qualified business income deduction?

4 Bea, a cash basis taxpayer, operates a small retail store. Her books show the following...

4 Bea, a cash basis taxpayer, operates a small retail store. Her books show the following income items for the year: Sales – paid, $72,000. Sales – unpaid, $3,500. Sale of cardboard packaging to recycling company, $2,500. What does Bea report as her gross income on her Schedule C?

Jonathan owns and operates a deli restaurant in New York City. It is a family business...

Jonathan owns and operates a deli restaurant in New York City. It is a family business and all of the employees are family members. Jonathan wants to establish a retirement plan so he can save for retirement and the retirement of his employees on a tax deferred basis. Jonathan only wants to contribute to the plan when the business makes a profit. He is happy to contribute on behalf of his employees if the business is doing well. He wants...

When Jimmy and Evelyn founded a new restaurant, they purchased supplies on company credit cards and...

When Jimmy and Evelyn founded a new restaurant, they purchased supplies on company credit cards and used the points for personal travel. As the chain grew, they brought in a second investor, and the three of them shared the points among themselves, allowing them to purchase several business-class tickets to Europe each year. As the chain continued to grow, two more outside investors were brought in. The new CFO who came with them insisted that the points be used only...

Dominick Aldo owns and operates Carolina’s which is an Italian restaurant in New York. The file...

Dominick Aldo owns and operates Carolina’s which is an Italian restaurant in New York. The file Single Population.xlsx is shown below and contains the amount of time that table times varied from table to table. A) Test the hypothesis that the average table time exceeds 98 minutes using 0.05 ? = . B) What is the p-value? Interpret the results. Be sure that your project shows the following steps 1. Null and alternative hypothesis 2. Determine which distribution to use...

Anthony is a chef who owns a small restaurant in Cleveland, Ohio as a sole proprietor....

Anthony is a chef who owns a small restaurant in Cleveland, Ohio as a sole proprietor. Because the business is struggling in the beginning, Anthony frequently puts money from his own personal account into the business account for the restaurant. After a while, business is picking up and he decides to expand by purchasing a food truck. In the beginning he is able to run the food truck during the day, and then open his restaurant just in the evening...

The accrual basis, not the cash basis, recognizes all aspects of the credit phenomenon. Select one:...

The accrual basis, not the cash basis, recognizes all aspects of the credit phenomenon. Select one: True False

Your mother operates a small restaurant but has limited knowledge of how to arrive at a...

Your mother operates a small restaurant but has limited knowledge of how to arrive at a selling price that would cover her cost and yield a desired profit. Based on your knowledge of calculating menu selling prices; you have decided to assist your mother with a strategy that would effectively cover her cost and earn a profit which is in line with her objectives of achieving 40% profit at the end of the year. You are required to Discuss appropriate...

George Jetson owns and operates a restaurant and catering business which has seen the business show...

George Jetson owns and operates a restaurant and catering business which has seen the business show an increase in revenue over the last 6 months. With an increase in revenues George realized the expenses would also increase, but expected to see an increase in the cash position of the business. In reviewing the cash position and bank account, he has realized there has been a decrease in the cash position. The business receives cash and credit cards at the restaurant...

Question