CASE: HAROLD DAVIS and ENID DAVIS, Plaintiffs-Appellants, v. UNITED STATES OF AMERICA, Defendant-Appellee UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT 861 F.2d 558 November 14, 1988 Plaintiff-appellants Harold and Enid Davis claimed charitable deductions under IRC section 170 for funds they sent to their two sons for their support while they served as full-time unpaid missionaries for the Church of Jesus Christ of LatterDay-Saints at the New York City Mission and at the New Zealand/Cook Islands Mission. These deductions were disallowed by the IRS. BACKGROUND A primary activity of the Church is its worldwide missionary program. Over 25,000 individuals have participated annually since 1977. Missionaries typically serve the Church for two years at a location assigned by the Church. Missionary work is uncompensated, but the Church will pay mission-related expenses if the missionary is unable to support himself or obtain the necessary funds from his family. Most missionaries are between the ages of nineteen and twenty-two; many receive payments from their parents to defray their living expenses. After an individual is "called" by the Church to serve as a missionary the Church advises parents of the amount that it believes will be necessary to provide for the missionary's support and requests their assistance. The life of a missionary is closely supervised. Mission rules prohibit missionaries from dating, attending movies or plays, or engaging in various sports or other activities. Missionaries are required to submit weekly reports detailing the time spent in Church service and explaining their expenses for the week. The Missionary Handbook contains the following admonition: "The money received for your support is sacred and should be spent wisely and only for necessary work. Keep expenses at a minimum. Keep records of all expenditures." The Church gives several reasons for its preference not to collect and distribute contributions for its missionaries. First, the Church feels that direct contributions to missionaries foster the Church doctrine of sacrifice and consecration. Second, the Church believes that direct transmittal promotes frugality by missionaries because of their awareness of the personal sacrifices that are being made on their behalf. Third, direct transmittal reduces the administrative and bookkeeping expenses that would otherwise be imposed on the Church. The appellants' sons, Benjamin and Cecil, both were "called" by the Church to serve as missionaries when they became nineteen years old. During 1980 and 1981 the appellants transferred $3480 and $4135 to Benjamin. Benjamin used this money primarily for living expenses. During 1981 appellants transferred $1518 to Cecil. Cecil also used this money primarily to pay his living expenses. The appellants filed two amended tax returns for 1980 and 1981, claiming as charitable contributions the full amounts they sent to their sons. DISCUSSION A. Applicable Law We take judicial notice of the fact that the Church is a qualified religious organization to which deductible contributions can be made. Internal Revenue Service Publication No. 78, Cumulative List of Organizations 216 (1984). Under Section 170, deductions are allowed for contributions "to or for the use of" qualified organizations. The requisite elements are that (1) the transfer of property is made with no expectation of a quid pro quo, (2) it is made to a qualified recipient, and (3) it is made "to or for the use of" the qualified recipient. The appellants argue that the payments to their sons were "for the use of" the Church and therefore deductible as charitable contributions. The government argues that the expenditures were not charitable contributions because they were never within the physical control of the Church. B. Charitable Contributions In situations where a taxpayer has claimed a charitable deduction for funds that have been earmarked for a specific individual, courts have considered whether the charity exercises control over the use of the funds. The appellants claim that actual control by the charity is a factor to be considered, but should not be required in all cases. The government responds that the deduction should be disallowed because the contributions were received directly by the missionaries from the taxpayer parents and were neither to nor for the use of the Church. The better reasoned approach, we feel, is to require that the recipient charity have control over the donated funds. The control gauge stems from the basic requirement that the beneficiary of a charitable contribution must be indefinite. When a taxpayer intends a contribution for a specific purpose, or even a specific individual, but the charity retains control over the funds, this requirement is satisfied. But when a taxpayer makes a contribution directly to the intended beneficiary so that the charity never possesses the funds, let alone controls their use, there can be no guarantee that the beneficiary will be indefinite. See Barry's Estate v. Commissioner, 311 F.2d 681 (9th Cir. 1982) (property bequeathed to member of Jesuit Order, as opposed to Order itself, not deductible though legatee obligated by Canon law to transfer property acquired to the Order). Here the charity lacked actual control over the funds. Contributions were deposited directly into the personal checking accounts of the taxpayers' sons. While the Church admonished the missionaries to spend their money wisely, the use to which the funds were put was solely within the control of the missionaries. CONCLUSION We do not question the high ideals of the Church or the valuable services it performs in connection with its missionary program. We are constrained by the law, however; and it is up to the legislature to provide the remedy that is sought by the appellants. The decision of the lower court is affirmed.

Question: The brothers Davis bravely did missionary work for the LDS Church. Their parents supported them financially. Discuss how you, as the Davis family’s CPA, would have argued to the IRS auditor (or the court) that the amounts paid by the Davis parents were properly deductible as charitable contributions.

If you don’t repay a loan, and a lot of time passes, the debt can grow to unmanageable proportions, as happened to an unfortunate borrower in Melbourne. A grandmother has been forced to put her house up for sale after she ended up owing a massive $83 000 —on a $15 000 loan. Andrea lane, 57, borrowed the money in 2002 to pay for her father’s funeral and to buy a new oven for her Clayton home. But she could not meet the cost of the loan and 18 years later, the amount she owed had grown to $83 000 … Andrea said: ‘I borrowed the money when I was grieving for my father. I just signed the papers.’

a) Based on original loan of $15000, calculate the monthly repayments to be repaid over 5 years. Assume an interest rate of 25% p.a.

Andrea can afford to pay $600 per month into the loan, and she has been able to negotiate a new interest rate of 8% p.a.

b) How long would it take Andrea to repay the loan?

c) If she cannot afford to increase her current repayments, and is unable to negotiate a better interest rate, recommend a strategy to reduce the total length of time to repay the loan? Based on this strategy, how much interest would she save?

If you don’t repay a loan, and a lot of time passes, the debt can grow to unmanageable proportions, as happened to an unfortunate borrower in Melbourne. A grandmother has been forced to put her house up for sale after she ended up owing a massive $83 000 —on a $15 000 loan. Andrea lane, 57, borrowed the money in 2002 to pay for her father’s funeral and to buy a new oven for her Clayton home. But she could not meet the cost of the loan and 18 years later, the amount she owed had grown to $83 000 … Andrea said: ‘I borrowed the money when I was grieving for my father. I just signed the papers.’

a) Based on original loan of $15000, calculate the monthly repayments to be repaid over 5 years. Assume an interest rate of 25% p.a.

Andrea can afford to pay $600 per month into the loan, and she has been able to negotiate a new interest rate of 8% p.a.

b) How long would it take Andrea to repay the loan?

c) If she cannot afford to increase her current repayments, and is unable to negotiate a better interest rate, recommend a strategy to reduce the total length of time to repay the loan? Based on this strategy, how much interest would she save?

I really would appreciate it if someone could provide me with the Excel formulas to calculate the last five (5) columns of the spreadsheet listed below.

There have been several recent cases of a CEO or CFO resigning or being ousted for misrepresenting academic credentials. For instance, during February 2006, the CEO of RadioShack resigned by “mutual agreement” for inflating his educational background. During 2002, Veritas Software Corporation’s DFO resigned after claiming to have an MBA from Stanford University. On the other hand, Bausch & Lomb Inc.’s board refused the CEO’s offer to resign following a questionable claim to have an MBA.

Suppose you have been retained by the board of a company where the CEO has ‘overstated’ credentials. This company has a code of ethics and conduct which states that the employee should always do “the right thing.”

(a) What is the board of directors’ responsibility in such matters?

(b) What arguments would you make to ask the CEO to resign? What damage might be caused if the decision is made to retain the current CEO?

Question 5
a) Students’ attitude towards teachers and class is a major cause of plagiarism. Some students cheat because they have negative student attitudes towards assignments and tasks that teachers think have meaning but they don’t” (Howard, 2002). Illustrate your agreement or disagreement with the above statement. (EV – 6 marks)
b) Based on the statement in (a) critically analyze in details and with the use of your own examples three major means of reducing plagiarism among university students.
(CR – 6 marks)
c) Engaging unethical behaviors in your academic journey usually is not encouraged as it gives a terrible reflection of the potentially bad professional behaviors you will exhibit in the future. With the backing of practical examples of your choice, discuss and justify how unprincipled and unethical behaviors of a professional can convey distress or potential harm to a customer and describe which key remedies can be used to resolve the condition.
(AN – 8 marks

3: Access Inc. is in operation from last 8 years, and have a balance of $640,000 in the machinery account as at Jan 01, 2000. the remaning life of this machinery is 7 years and had a salvage value of 63000. On August 01, 2000, the Company made additions to the machinery a/c of $98,000. The machinery is expected to produce a total of 200,000 units. The machinery was used in the production in the following manner:

Year Production

2000 13,400

2001 34,200

2002 38,400

2003 39,100

2004 31,900

2005 28,060

2006 14,940

There was another addition to the machineries for $126,000 on Jan 01, 2002. The useful life of the asset is 9 years and it can realize $13,400 at the end of 9 years. On Jan 01, 2006, the company reassessed the useful life of this machiney to be 11 years, while the salvage value remained the same.

On Oct 01, 2005, the company bought an equipemt, which was expected to be used a total of 46,000 machine hours (MH) The equipment was used as per the below mentioned schedule:

2005 $ 1,730

2006 $ 4,200

2007 $ 3,100

2008 $ 4,600

2009 $ 5,900

2010 $ 7,070

At the end of 2010, the company assessed that its original estimation was wrong and the equipment is expected to work only 12,000 more machine hours. During 2011, the equipment was used for 4,800MH, 2012 5,300MH, and rest of the hours were used in 2013.

Prepared a schedule of the machinery and equipment account together.

Show your working notes properly.

Hint: For presentation purpose, you can give numbering to the machinese,

ABC company's vice president of marketing proposes a new program to significantly increase product sales by 250,000 units per year throughout the 1998-2004 period. Specifically, it is suggested that the company take the following actions: A. Spend $2.5 million over the period of 1998-2000 as promotional expenditures - for example, spend $1.0 million each in the years 1998, 1999, and $0.5 million in the year 2000. B. Make a one-time investment of $1.4 million in plants and equipment needed at the beginning of 1998 to generate these additional products. No new warehouse capability is needed. This investment is to be depreciated on a straight-line basis over the seven-year period. There will be no salvage values for these plants and equipment in 2005. It is further assumed that the product unit cost is $8.00 in 1998, and it is estimated to increase by 3 percent per year. The product unit price is $20 in 1998, and it is estimated to change as manifested in the following table: Items 1998 1999 2000 2001 2002 2003 2004 Unit Price $20.00 $20.60 $21.00 $21.15 $21.25 $21.25 $21.00 The SG&A expenditure is estimated at $1.25 million in 1998, and it will increase by 3 percent per year during the six-year period. A corporate tax of 40 percent must be paid for any marginal income. There is an interest charge during this period, and the company's weighted average cost of capital (WACC) is 8 percent. If the company's hurdle rate for this type of investment is 25 percent, and the NPV (Net Present Value) for the proposed marketing initiative is negative at that hurdle rate of 0.25, why would you not recommend the marketing initiative be approved? Explain in depth.

If a velocity profile of a boundary layer is u= a+by+cy^2, please calculate the value of a, b and c, using the boundary conditions.

Please show all steps. I am trying to understand the process. Thank you (:

The role of women ministry in the church.