1. Which of the following statements is not true regarding safety custom?

A Evidence that defendant violated customary safety precautions of the relevant community is usually sufficient to get plaintiff’s case to the jury.

B A defendant who complied with all safety requirements of a statute might still be negligent.

C In many courts, plaintiff has been allowed to introduce into evidence safety manuals written by private organizations to show that defendant, in failing to follow such manuals, fell below the standard of reasonable care.

D A defendant who fails to comply with a safety custom established by a statute or ordinance may introduce evidence that the statute or ordinance is customarily violated by others in the community as evidence of the defendant’s reasonable conduct

2. Which of the following statements is true regarding the role of the jury in deciding unreasonableness?

A Because reasonableness is a question of fact, the jury always decides this issue.

B Because reasonableness is a question of fact, the jury always decides this issue, subject to the judge’s right to make the ultimate decision.

C Because reasonableness is a question of law, the judge always decides this issue.

D The “fixed standard of reasonableness” approach is now a firmly established legal principle.

3. Based on your reading of the Santiago v. First Student, Inc. case, which of the following statements is true?

A The court indicated that it disbelieved the plaintiff.

B One cannot prove unreasonable risk without establishing specific facts of conduct.

C The nature of an accident was almost always sufficient to show unreasonableness.

D Justifiable speculation is generally sufficient to establish unreasonableness.

4. Which of the following is not an accurate definition of breach of duty.

A An act, the nonoccurrence of which may cause damage to another.

B The defendant’s failure to meet the standard of care.

C The defendant’s failure to act as a reasonable person would have acted under the same or similar circumstances.

D The unreasonable conduct by the defendant.

1. For 2011, the Butternut Corporation has net income on its books of $75,000, including the following items:
Net capital losses $10,000 
Federal income tax expense 22,250 
Federal tax depreciation exceeds the depreciation deducted on the books by $7,250. What is the corporation’s taxable income?




A) $97,250 


B) $75,000 


C) $85,000 


D) $107,250 


E) $100,000 




2. Ted forms the Nutshell Corporation during the 2011 tax year. To form the corporation, Ted transfers assets having a fair market value of $550,000 to Nutshell Corporation for 100 percent of the corporation’s stock. Ted’s adjusted basis in the assets transferred was $250,000 and Nutshell Corporation assumed a $175,000 mortgage on the assets. If the fair market value of the stock received by Ted is $375,000, what is his basis in the stock received from the corporation?



A) $75,000 


B) $425,000 


C) $550,000 


D) $375,000 



3.The partnership of Nixon and Whittier realized the following items of income during the year ended December 31, 2011:

Net income from operations $93,000 
Dividends from domestic corporations 5,000 
Interest on corporate bonds 2,000 
Net long-term capital gains 15,000 
Net short-term capital gains 11,000 

Both of the partners are on a calendar year basis. What is the total income which should be reported as ordinary income from business activities of the partnership for 2011?


A) $126,000 


B) $74,000 


C) $60,000 


D) $93,000 


E) $100,000 


F) $250,000 



4. On September 30, 2011, Amber was admitted to partnership in the firm of Waves and Grain. Her contribution to capital consisted of 1,000 shares of stock in Biotech Corporation, which she bought in 2002 for $15,000 and which had a fair market value of $45,000 on September 30, 2011. Amber’s interest in the partnership’s capital and profits is 40 percent. On September 30, 2011, the fair market value of the partnership’s net assets (after Amber was admitted) was $112,500, and profit for the 3 months ended December 31, 2011 was $6,000. What is Amber’s taxable gain in 2011 on the exchange of stock for her partnership interest?


A) $12,000 


B) $30,000 long-term capital gain 


C) $30,000 ordinary income 


D) $2,400 


E) $0 gain or loss 



Question 1 

Which of the following statements is true about referring to visuals in the text of a document? 

A. In general, you should refer to visuals in the text of the document.

B. In general, the audience will check the visual whether you refer to it in the text or not.

C. Textual references should never be placed in parenthetical references.

D. If you embed a textual reference in a sentence, the reader will not pay attention to it.

Question 2 

Which of the following statements about the placement of visuals is true? 

A. Visuals that readers need to refer to repeatedly should be placed at the front of the document.

B. Always place visuals on the right side of the page; people tend not to look at visuals placed on the left side of a page.

C. If a visual requires an entire page in a document printed only on one side of the paper, place the visual on the page following the text reference.

D. If a formal report has more than two visuals, include a list of figures or a list of tables at the beginning of the document.

Question 3 

Symbols used by most countries in which there is a yellow triangle with a black band and a black graphic on it: 

A. are used to give directions to travelers.

B. prohibit whatever is written on the sign.

C. signal a safety precaution, such as “ear protection necessary.”

D. warn about whatever is displayed in the triangle.

Question 4 

Which of the following statements is true about scatter graphs? 

A. Because scatter graphs are relatively easy to interpret, their statistical relevance does not have to be discussed in the text.

B. If the dots are randomly scattered, they have a high degree of correlation.

C. If the diagonal runs from the upper left to the lower right, the correlation is positive.

D. Because interpreting scatter graphs is often difficult, their use is generally limited to professional and expert audiences.

1.  Assume the same facts as in the previous question (again, ignore any deduction that may relate to self-employment taxes).  Brian’s Taxable Income for 2012 is:

1.$76,000

2.$70,000

3.$64,000

4.$48,200

2.  Descartes and John are married taxpayers who file a joint return.  In 2009, they had AGI of $600,000 and their preliminary itemized deductions totaled $40,000.  In 2011, they also had AGI of $600,000 and preliminary itemized deductions of $40,000.  Which of the following is TRUE?

1.When comparing their 2009 and 2011 returns, they were able to actually deduct more itemized deductions on their 2011 return

2.When comparing their 2009 and 2011 returns, they were able to actually deduct more itemized deductions on their 2009 return

3.When comparing their 2009 and 2011 returns, they were able to actually deduct the same amount of itemized deductions on each return

4.They were not able to actually deduct any itemized deductions on either their 2009 return or their 2011 return

3.  In early 2012, Theresa received a gift of a home valued at $500,000 (from Theresa’s mother, Leslie).  Leslie also gave Theresa a $10,000 cash gift.  During 2012, Theresa rented the home to Patricia.  As a result of the lease with Patricia, Theresa will earn net rental income of $20,000 (for 2012).  What amount of income should Theresa’s 2012 tax return include from these transactions?

1.$530,000

2.$30,000

3.$20,000

4.$0

4.  In 2012, Sheree, a calendar-year taxpayer, purchased business equipment (5-year property) for $900,000.  The property was placed in service during 2012 (and is being used exclusively in Sheree’s extremely profitable business).  No other personal property is purchased by Sheree in 2012.  What is the most that Sheree may deduct in 2012 under Section 179 of the Code (ignore any potential deductions resulting from bonus deprecation or MACRS)?

1.$900,000

2.$560,000

3.$139,000

4.$0

1. Which of the following states one of Williston’s Rules regarding the parol evidence rule?

Based upon the Nanakuli Paving and Rock Co. v. Shell Oil Co. case, which of the following statements is true?

A The court limited the interpretation of the contract terms to the “four corners” of the written agreement.

B The case applied the common law in a way “to promote flexibility in the expansion of commercial practices.”

C The parties’ course of performance was more important than trade usage to determine the terms of an agreement.

D The court refused to consider the “entire commercial context of the agreement.”

2. Which of the following states the best definition of the parol evidence rule?

A Agreements that are not in writing are invalid.

B A final agreement supersedes tentative terms discussed in earlier negotiations.

C Parol evidence is not admissible for contracts involving the purchase of land.

D Proposed, oral terms of a contract cannot become part of the final agreement.

3. Which of the following statements is NOT true regarding course of dealing, course of performance and usage?

A These topics are not applicable at common law.

B A party engaged in a trade is bound by the usages of that trade even if that party has no knowledge of the trade usage in question.

C At common law, a course of dealing is admissible whenever extrinsic evidence is admissible.

D Under the UCC, trade usage and course of dealing are always admissible, but the evidence is not always controlling.

4. Which of the following statements about the parol evidence rule is false?

A A writing that is final integrates the terms embodied in it.

B A writing intended by the parties to be a final embodiment of their oral agreement should be protected from attack by evidence of contradictory prior or contemporaneous agreements.

C Oral evidence of a term not in the written agreement is not admissible.

D The parol evidence rule applies when the last expression is a written and binding contract.