Business Law II Davaros Debtor is a New Jersey resident who is thinking about filing for bankruptcy. Debtor has been employed in the past by ABC Corporation where he made $75,000 a year. As ABC Corporation hit hard financial times, Debtor was laid off. Debtor is currently working, but took a cut in salary to be employed and is making $45,000 a year. When Debtor was out of work, he was injured and amassed $100,000 in medical bills as he didn't have insurance. Of this amount, around $20,000 is due to Dr. Detroit, and the remaining $80,000 is owed to General Hospital. Debtor also has $50,000 in credit card debt on his Visa card. The mortgage on the home where he currently resides is $350,000. Debtor is currently separated from his spouse, to whom he owes around $12,000 in child support. Debtor is still paying off loans from his undergraduate education to Sally Mae. While still employed at ABC, Debtor purchased a summer home at the New Jersey shore. Purchased for $200,000, he sold the home around a year ago for $75,000 to a distant cousin. Is Debtor a candidate for bankruptcy protection? Why or why not? If Debtor isn't a candidate for bankruptcy protection, is there anything that Debtor can do to become eligible to file for bankruptcy protection. If so, what Chapter should Debtor file under? In your answer, identify why you've selected the Chapter that you have. Intermediate ACCT II Discuss how income smoothing can be achieved as it relates to the recording of pensions. You are in your third year as an internal auditor with VXI International, manufacturer of parts and supplies for jet aircraft. VXI began a defined contribution pension plan three years ago. The plan is a so-called 401(k) plan that permits voluntary contributions by employees. Employees’ contribution are matched with one dollar of employer contribution for every two dollars of employee contribution. Approximately $500,000 of contributions is deducted from employee paychecks each month for investment in one of three employer-sponsored mutual funds. While performing some preliminary audit tests, you happen to notice that employee contributions to these plans usually do not show up on mutual fund statements for up to two months following the end of pay periods from which the deductions are drawn. On further investigation, you discover that when the plan was first begun, contribution were invested within one week of receipt of the funds. When you question the firm’s investment manager about the apparent change in the timing of investments, you are told, “Last year Mr. Maxwell (the CFO) directed me to initially deposit the contributions in the corporate investment account. At the close of each quarter, we add the employer matching contribution and deposit the combined amount in specific employee mutual funds.” What is Mr. Maxwell’s apparent motivation for the change in the way contributions are handled? Do you perceive an ethical dilemma? Why or why not?