Mark Burnett and Kamran Pourgol were the only shareholders in a corporation that built and sold a house. When the buyers discovered that the house exceeded the amount of square footage allowed by the building permit, Pourgol agreed to renovate the house to conform to the permit. No work was done, however, and Burnett filed a suit against Pourgol. Burnett claimed that, without his knowledge, Pourgol had submitted incorrect plans to obtain the building permit, misrepresented the extent of the renovation, and failed to fix the house. Was Pourgol guilty of misconduct? If so, how might it have been avoided? Discuss.

1) Burnett is a (memeber, partner, or shareholder) in the corporation.

2) Pourgol held a (majority, minority, unclear) amount of shares in the close corporation.

3) Assume that Pourgol and Burnett agreed to the plans submitted to the town and Burnett and was made aware beforehand of the promise to fix the buyer's home. Would Pourgol most likely be held liable in this instance? (yes, no)

4) Would the buyers still be able to recover the costs of renovation to conform the house allowed by the building permit? (yes, no)

You have been hired as a consultant to assess the impact of a spill of 10 kg of chlorobenzene in a river adjacent
to a small town. The average width is 20m, average depth is 2.4m, and has a discharge of 8.7 m3/s. The
average water temperature is 22 °C, the average air temperature is 27 °C, and the average wind speed is
4.25 m/s. The suspended solids concentration has been measured at 7 mg/L, Kd for chlorobenzene is 4.27 cm3/g,
and the average sedimentation velocity is 0.8 m/d.
(a) Assess the impact of the spill on the town’s water supply intake 1 km downstream of the spill location.
Please compare this value with the EPA’s MCL for chlorobenzene.
(b) Investigate the relative importance of volatilization and sedimentation on the expected concentration of
chlorobenzene at the water-supply intake.
(c) If the city engineer decides to shut down the water-supply intake when the river water at the intake
exceeds the drinking water standard, for approximately how long will the intake be shut down?

Underline and correct the misplaced and dangling modifiers.

Creamy, sweet, and irresistible, Betty does crazy things to feed her addiction to chocolate. ²Last Monday, desperate for chocolate, a thunderstorm did not deter her from going out for candy. ³Squinting past the windshield wipers, sheeting rain poured as she splashed into the parking lot of Food Town. ⁴Minutes later, wet but triumphant, her purchase was made. ⁵The store nearly charged five dollars for the candy, but she did not mind. ⁶She munched on it straight from the bag as she drove on the seat beside her. ⁷Eating and driving at the same time, an accident was barely avoided when she swerved to keep from hitting a pedestrian. ⁸She only saw him at the last minute. ⁹Then, struck by a bolt of lightning, she saw a huge tree that had split down the middle. ¹⁰She realized that she had taken an unnecessary risk in going out for candy in a thunderstorm that she did not really need at all.

1. Wardco mining would like to expand operations in a west Texas region affecting a single small town. Expansion would put toxic chemicals into the groundwater that, if untreated, would make the water undrinkable. This is the only effect and, even then, the chemicals breakdown in about a decade.

a. If it cost Wardco $40 million to extract the minerals but would cost $10million to treat the water and the value of mined products to customers is $60million, should Wardco be required to pay the cost of treating the water?

b. If it cost Wardco $40 million to extract the minerals but would cost $10million to treat the water and the value of mined products to customers is $48million, should Wardco be required to pay the cost of treating the water? Would Wardco do so?

c. Suppose it cost Wardco $40 million to extract the minerals and the value of mined products to customers is $48million. It would cost $10million to treat the water but only $5million to buy all the affected residents’ property. Should Wardco be required to treat the water in this case?

5. Wardco mining would like to expand operations in a west Texas region affecting a single small town. Expansion would put toxic chemicals into the groundwater that, if untreated, would make the water undrinkable. This is the only effect and, even then, the chemicals breakdown in about a decade. a. If it cost Wardco $40 million to extract the minerals but would cost $10million to treat the water and the value of mined products to customers is $60million, should Wardco be required to pay the cost of treating the water? b. If it cost Wardco $40 million to extract the minerals but would cost $10million to treat the water and the value of mined products to customers is $48million, should Wardco be required to pay the cost of treating the water? Would Wardco do so? c. Suppose it cost Wardco $40 million to extract the minerals and the value of mined products to customers is $48million. It would cost $10million to treat the water but only $5million to buy all the affected residents’ property. Should Wardco be required to treat the water in this case?

1. Problem 8-77A
   Excise Taxes

   Reagan Gas provides gas utilities to a wide area of eastern Illinois. During May 2019 it billed 36,000 of its residential customers located in the town of Moline a total of $3,295,000 for electricity (this is considered revenue). In addition Reagan is required to collect the following taxes:

   1. State excise tax: A tax of $5.00 per customer plus 3% of billing used to fund the Illinois Energy Commission
   2. Federal excise tax: A tax of $0.45 per customer plus 0.2% of billing used to fund the Federal Energy Commission

   Required:

   1. Determine how much Reagan will bill these customers in total for the month of May 2019.
   $

   2. Prepare the entry to record the billing of these amounts. If an amount box does not require an entry, leave it blank.

   	(Record sale)

   3. Prepare the entry to record the collection of these amounts.

   	(Record collection of receivables)

   4. Prepare the entry to record the payment of the state excise taxes to the appropriate governmental unit.

   	(Record payment)

Check My Work

Q4 - Week 9 a) What are key audit matters? How do these affect the format of the audit report? (2 marks, maximum 200 words) b) Stewart Jones is reviewing the results of the subsequent events audit procedures. Stewart is writing a report for his audit partner based on these results and will be attending a meeting tomorrow with the partner and representatives of the company to discuss them. The issue will be whether the financial report should be amended, or additional notes included for these subsequent events. Many of the items are not material and Stewart will recommend that no action be taken with respect to these. However, there are several items that Stewart believes are material and should be discussed at the meeting. These are as follows. (a) The board is planning to issue shares in a private placement on 15 August. (b) The share issue is to fund the purchase of a 60 per cent stake in another company. The negotiations are in the final stages and although the contract is not yet signed it will be signed by 15 August. (c) A writ was lodged in the Supreme Court in the week after year-end claiming damages for illness allegedly caused by chemicals used at a subsidiary company’s manufacturing plant in the 1990s. This is the tenth such writ lodged, and the client has denied responsibility in all cases because it was unreasonable to believe at that time that these chemicals had adverse health effects. The claimant has new scientific evidence that counters this defence. (d) The review of subsequent cash receipts has revealed that several of the trade receivables that were considered doubtful have now been paid. However, the audit procedures have shown that a large debtor that was considered safe at 30 June was unexpectedly declared bankrupt on 20 July. The year-end for the company is 30 June and the audit report is due to be signed on 20 August. Required: For each of the items above, explain what type of subsequent event it is and the appropriate treatment of the item in the financial report. (8 marks, maximum 300 words) Part A: Like an essay type presentation Part B: Issues Event/ Accounting Treatment (1 mark) Explanation (1 mark) (a)(/(b)/ Write 1 line about issue Types 1 Adjusting Subsequent Event – Adjust material items in financial report Or Type 2 Non-Adjusting Subsequent Event – Disclose effects of material items in financial report Or Type- No effect/ No impact Here you will mention about date, explain why you select this event with details explanation or accounting treatment and follow AASB 110 Event after the reporting period

a) What are key audit matters? How do these affect the format of the audit report? (2 marks, maximum 200 words) b) Stewart Jones is reviewing the results of the subsequent events audit procedures. Stewart is writing a report for his audit partner based on these results and will be attending a meeting tomorrow with the partner and representatives of the company to discuss them. The issue will be whether the financial report should be amended, or additional notes included for these subsequent events. Many of the items are not material and Stewart will recommend that no action be taken with respect to these. However, there are several items that Stewart believes are material and should be discussed at the meeting. These are as follows. (a) The board is planning to issue shares in a private placement on 15 August. (b) The share issue is to fund the purchase of a 60 per cent stake in another company. The negotiations are in the final stages and although the contract is not yet signed it will be signed by 15 August. (c) A writ was lodged in the Supreme Court in the week after year-end claiming damages for illness allegedly caused by chemicals used at a subsidiary company’s manufacturing plant in the 1990s. This is the tenth such writ lodged, and the client has denied responsibility in all cases because it was unreasonable to believe at that time that these chemicals had adverse health effects. The claimant has new scientific evidence that counters this defence. (d) The review of subsequent cash receipts has revealed that several of the trade receivables that were considered doubtful have now been paid. However, the audit procedures have shown that a large debtor that was considered safe at 30 June was unexpectedly declared bankrupt on 20 July. The year-end for the company is 30 June and the audit report is due to be signed on 20 August. Required: For each of the items above, explain what type of subsequent event it is and the appropriate treatment of the item in the financial report. (8 marks, maximum 300 words)

Part A: Like an essay type presentation

Part B: Issues Event/ Accounting Treatment (1 mark) Explanation (1 mark) (a)(/(b)/ Write 1 line about issue Types 1 Adjusting Subsequent Event – Adjust material items in financial report Or Type 2 Non-Adjusting Subsequent Event – Disclose effects of material items in financial report Or Type- No effect/ No impact Here you will mention about date, explain why you select this event with details explanation or accounting treatment and follow AASB 110 Event after the reporting period

a) What are key audit matters? How do these affect the format of the audit report? ( maximum 200 words)

b) Stewart Jones is reviewing the results of the subsequent events audit procedures. Stewart is writing a report for his audit partner based on these results and will be attending a meeting tomorrow with the partner and representatives of the company to discuss them. The issue will be whether the financial report should be amended, or additional notes included for these subsequent events. Many of the items are not material and Stewart will recommend that no action be taken with respect to these. However, there are several items that Stewart believes are material and should be discussed at the meeting. These are as follows.

(a) The board is planning to issue shares in a private placement on 15 August.  

( b) The share issue is to fund the purchase of a 60 per cent stake in another company. The negotiations are in the final stages and although the contract is not yet signed it will be signed by 15 August.

(c) A writ was lodged in the Supreme Court in the week after year-end claiming damages for illness allegedly caused by chemicals used at a subsidiary company’s manufacturing plant in the 1990s. This is the tenth such writ lodged, and the client has denied responsibility in all cases because it was unreasonable to believe at that time that these chemicals had adverse health effects. The claimant has new scientific evidence that counters this defence.

(d) The review of subsequent cash receipts has revealed that several of the trade receivables that were considered doubtful have now been paid. However, the audit procedures have shown that a large debtor that was considered safe at 30 June was unexpectedly declared bankrupt on 20 July. The year-end for the company is 30 June and the audit report is due to be signed on 20 August.

Required: For each of the items above, explain what type of subsequent event it is and the appropriate treatment of the item in the financial report. (, maximum 300 words)

Part A: Like an essay type presentation

Part B: Issues Event/ Accounting Treatment (1 mark) Explanation (1 mark) (a)(/(b)/ Write 1 line about issue Types 1 Adjusting Subsequent Event – Adjust material items in financial report Or Type 2 Non-Adjusting Subsequent Event – Disclose effects of material items in financial report Or Type- No effect/ No impact Here you will mention about date, explain why you select this event with details explanation or accounting treatment and follow AASB 110 Event after the reporting period