Homework Help

Business
Accounting
case study 4 homegrown gardens llp is a 10 million...

Question: case study 4 homegrown gardens llp is a 10 million...

Question details

Case Study 4 Homegrown Gardens, LLP, is a $10 million nursery and garden retailer in Florida. Homegrown employs about 20 full-time and seasonal employees. The majority of the plants and nursery stock that Homegrown sells comes from Monromio Nurseries, a wholesaler based in Alabama. Monromio is recognized throughout the South for the quality of the plants it grows and sells. Homegrown is generally happy to pay the premium prices that Monromios plants command, because it passes the extra costs on to its customers, who value the high-quality plants it sells. However, Barry Greenstem, one of Homegrowns managing partners, is visibly upset after speaking with the owners of other nurseries at a recent trade show in Atlanta. Although Monromio has increased its prices across the board, Monromios price hike to Homegrown is larger than the average. Barry suspects that Betty Stevenson, Homegrowns assistant manager in charge of purchasing nursery stock, may be accepting kickbacks from Monromio in return for allowing higher purchase prices. Betty and her husband, Mike, purchased a new SUV, a houseboat, and several ATVs last year and moved into a new, larger house this year. Barry knows that Bettys salary isnt high enough to support the new lifestyle, and he doubts that Mikes job

as a city employee would provide large enough raises to justify the new toys. Barry hires you to perform a net worth investigation of Betty and Mike to determine the amount of any unknown income. Your search of public and private records reveals the following information: CASE STUDY 4 YEAR BEFORE LAST LAST YEAR THIS YEAR Assets: $70,000 $70,000 $200,000 residence Automobiles Houseboat ATVs Liabilities: Mortgage balance 35,00030,500100,000 Auto loarn Loan on 45,000 30,000 12,000 45,000 30,000 12,000 15,000 2,500 15,000 11,000 Income Bettys salary Mikes salary 25,000 25.500 26,000 37,000 5,00036,000 4,500 Mortgage payments Auto payments Houseboat payments Other living 4.500 13,000 1,800 1,800 2400 2,400 15,000 17,000 15,000 Question 1. Using this information, calculate the amount of e from unknown sources, if any, using the net worth method. (Olgnore interest in your calculations.) incom

Solution by an expert tutor

Blurred Solution

This question has been solved

Subscribe to see this solution