Develop proper predication and a theory of a fraud. The facts will be scant and so you should feel free to use your imagination on how to answer the questions, but do not create new facts. You will be asked to speculate and at that point you can use your imagination, but stay within the bounds of the real world, knowing that fraudsters do try to conceal their fraud. As with most frauds, this case starts with an anonymous tip that a certain employer is paying some, but not all, employees in cash, commonly referred to as being paid "under the table". The tip has been made to the Internal Revenue Service (IRS) and the tipster is claiming that the employer is avoiding the payment of payroll taxes by this action. You have been hired by the IRS as a forensic examiner to pursue the veracity of the claim.

The employer has a wholesale business of soft drinks, selling to various retailers. There are 25 employees working there. The employer is a well-known community leader.

Required:
a. Your first step is to prepare notes to the file called "Predication". Why is this done? Give two reasons.
b. What type of fraud is this?
c. Speculate/research as to what you might do to develop sufficient predication that will allow you to begin actual investigatory work. Meaning what additional facts would get you to the point of believing that you have sufficiently developed adequate predication to justify starting actual investigatory procedures. HINT: You do have access to documents within the IRS that you can obtain without fear of over-stepping the bounds that predication is protecting.
d. Develop a theory on how the fraud would have been perpetrated under the circumstances.
e. How would you go about testing your theory?

How will firms solve the problem of an economic surplus a. decrease prices to the market equilibrium price b. decrease prices so they are below the market equilibrium price c.increase prices

Required prepare the necessary adjusting entries in the general journal as of december 31, assuming the following: on september 1, the company entered into a prepaid equipment maintenance contract. birch company paid $3,400 to cover maintenance service for six months, beginning september 1. the payment was debited to prepaid maintenance. supplies on hand at december 31 are $3,900. unearned commission fees at december 31 are $7,000. commission fees earned but not yet billed at december 31 are $3,500. (note: debit fees receivable.) birch company's lease calls for rent of $1,600 per month payable on the first of each month, plus an annual amount equal to 1% of annual commissions earned. this additional rent is payable on january 10 of the following year. (note: be sure to use the adjusted amount of commissions earned in computing the additional rent.)

Fred smithers, a recent college graduate decided to open his own portable juice bar, smithers smoothies, to wheel around newport beach. you, a trusted friend of fred, are a business major that has also recently graduated and agreed to handle the books for a while to get some practical experience and have a favor that you can ask of fred in the future. given the following five transactions concerning the new venture, prepare the necessary journal entries for the transactions, post the journal entries to appropriate t accounts and prepare a trial balance as of the end of the month in order to answer to the necessary may 2: fred invests $12,000 of his own money to start the new company. this money was obtained from a part-time job working at a legal firm while he was in school. may 3: fred spent $5,100 cash to purchase a refrigerated trailer that he can pull behind his car and set up at the beach. under your advice, fred agrees to place the new asset under an account called "equipment." may 6: fred bought $640 of supplies on account from the flav-o-rite confectioners company. because they will last longer than a single accounting period fred agrees to record them as, "supplies" as per your suggestion. may 13: fred sat on the beach for six hours without a single sale and was feeling very down. right before he left, however, a plumber escorting his family reunion along the beach stopped by his stand and bought $800 worth of smoothies for the entire family. under your advice, fred agrees to call this cash revenue, "sales." may 15: excited about his new venture, fred withdraws $350 from the company to take his girlfriend out to dinner. what would be the balance in the cash account at the end of the period following the posting of all the transactions?