Girma is a senor college student. He owns a car that has a market value of 500,000 birr. He also has different personal properties in his rented home. He wears disposable contact lenses which costs him 800 birr every year. Moreover, he runs every day for 30 minutes in a nearby public park that has a track record of being dangerous because of drug dealers and purse-snatchings. His parents are working hard to support his tuition fee.
If Girma potentially faces the following risks, which risk handling tools will be the appropriate? Explain your answer appropriately 
Physical damage to his car because of collision with another car
Liability lawsuit against him because of negligent operation of his car
Total loss of his personal properties because of fire
Disappearance of his disposable contact lenses
Physical assault on Girma by drug dealers in the area where he runs
Loss of tuition fee helps because his father is killed by a drunk driver in car accident. 
Biruk took his friend, Tsion, out to dinner on her birth day. While driving Tsion home, Biruk became ill and asked Tsion to drive. While driving Biruk’s car, Tsion negligently injured another motorist when she failed to stop at red light. Biruk has a motor insurance policy with a liability insurance limit of 250,000 birr per person for bodily injury liability. Tsion has a similar motor insurance policy with a liability limit of 100,000 birr per person.
Required 
If court awards a liability judgment of 100,000 birr against Tsion, how much, if any, will each insurer pay?
If the liability judgment is 300,000 birr, how much, if any, will each insurer pay?
Assume that Biruk can’t afford to pay the premium and lets his Motor 

REVIEW QUESTIONS – Chapter 5

1. In federal courts, discovery requests may be directed to ____________.

a. Only parties to the lawsuit.

b. Only parties joined to the lawsuit, as approved by the court.

c. Parties and nonparties to the lawsuit.

d. None of the above.

2. Which of the following is not one of the four major types of discovery tools?

a. Requests for admissions.

b. Interrogatories.

c. Depositions.

d. All of the above are major types of discovery tools.

3. Which of the following statements is true regarding witness lists?

a. Their production does not require a discovery request.

b. Their production requires a subpoena.

c. Their production requires court approval.

d. None of the above.

4. Which of the following may not be commanded by a subpoena?

a. Testimony.

b. The production of documents.

c. Seizing of documents.

d. All of the above may be commanded by a subpoena.

5. High Quality Products Inc. files a suit against National Software Corporation. Mike is a witness for High Quality. Jim is a witness for National Software. High Quality may direct interrogatories to ____________.

a. National Software only.

b. Jim only.

c. National Software or Jim only.

d. National Software, Jim, or Mike.

e. None of the above.

6. In Ron’s suit against Second National Bank, the discovery phase would include all of the following except ____________.

a. Ron’s complaint.

b. Ron’s deposition.

c. Ron’s request for Second National’s admissions.

d. Second National’s replies to Ron’s interrogatories.

e. None of the above.

7. Home Appliances Inc. files suit against H.H. Jones Corporation over a contract between them. Before the trial starts, what can H.H. Jones obtain from Home Appliances?

a. Access to related documents in Home’s possession.

b. Accurate information about Home’s trade secrets.

c. An admission of truth of matters unrelated to the contract.

d. All of the above.

e. None of the above.

8. Abusive tactics are fostered by the court system because ____________.

a. Attorneys know that lawyers are given only one opportunity to comply with discovery requests.

b. Lawyers have an incentive to increase discovery costs as they can bill their clients for more hours worked.

c. No penalties exist whatsoever for using abusive tactics.

d. None of the above.

9. The FRCP allows each party up to 10 depositions ____________.

a. To be taken however the party sees fit.

b. To be computed discretely allowing for the fact that a witness’s deposition may be taken more than once.

c. To be calculated cumulatively for plaintiffs, defendants, and third-party defendants.

d. As long as they are taken in a one-year time span.

e. None of the above.

10. If a party refuses to answer an interrogatory, the opposing party may file a motion to compel an answer. A motion to compel an answer ____________.

a. Will be granted if the moving party shows the answer is necessary to prepare for trial.

b. May be denied if the question asked is subject to a timely and valid objection.

c. May be denied if the question asked is an invasion of privacy of the other party.

d. Will be granted if the opposing party does not file a motion to refuse to respond.

e. None of the above.

11. Tom worked for a messenger service owned by Dalton. While Tom was driving a Dalton-owned vehicle on business in Miami, he hit and injured Pedro, a pedestrian who resides in Alabama. Pedro brought a diversity action against Dalton in federal court in Florida on a theory of respondeat superior (principal-agent). Personal service was properly made, pursuant to FRCP 4(e)(2), on Dalton, a Florida resident. Dalton now wishes to implead Tom as a third-party defendant (if Dalton is held liable to Pedro, Dalton will be entitled to indemnity from Tom). Tom is a resident of Puerto Rico and lives in San Juan, a two-hour flight from Miami. Dalton caused a licensed process server to serve Tom personally at Tom’s home in San Juan. Assume that Florida has no longarm statute allowing state-court jurisdiction over any defendant who cannot be physically found with Florida. Does the Florida federal court have personal jurisdiction over Dalton’s third-party claim against Tom?

a. Yes, because Tom was a third-party defendant who was served within 100 miles of the federal courthouse.

b. No, because there is no Florida long-arm statute that would authorize state-court jurisdiction over Tom.

c. Yes, because service was properly made on Dalton within Florida, the state or district where the federal suit is pending.

d. Yes, because Pedro, Dalton, and Tom are all citizens of different states or districts.

e. None of the above

1. Can shareholders of a C corporations deduct its lossesagainst corporation's E&P passed to its shareholders asdividends (i.e. income of shareholders)?

2. When can a C (regular) corporation's corporate veil bepierced resulting in its shareholders being personally liable forcorporation’s actions?

3. How is the income of the following business entitiestaxed?

•Sole proprietorship

•C (regular) corporation

•Partnership

•Limited liability corporation (LLC)

•S corporation

4. Kent and Craig, who want to start a horse-training business,spoke to an insurance agent about getting insurance to coverpotential liabilities, but were told that they could not getliability insurance because of the high risk nature their proposedbusiness. What business entities would you recommend to Kent andCraig? Why?

Please answer all the questions above.

Qustion :

. For the past five years, Clark CPAs has audited the financialstatements of a manufacturing company. During this period, theaudit scope was limited by the client as to the observation of theannual physical inventory. Because Clark CPAs considers theinventories to be material and was not able to satisfy the auditrequirements by using other auditing procedures, the firm wasunable to express an unmodified opinion on the financial statementsin each of the five years.
The CPA was allowed to observe physical inventories for the currentyear ended December 31, 2015, because the client’s bank would nolonger accept the audit reports. However, to minimize audit fees,the client requested that the CPA not extend audit procedures tothe inventory as of the beginning of the year, January 1, 2015.Which type of audit report would you suggest be issued this yearand why?

Note:

I have the answer, could you please paraphrase it ?

The answer is:

The scope of the audit has been restricted by inability toassess the inventory. Based on the information,this appears to behighly material or material, depending upon the auditor'spreliminary judgment about materiality. Because the auditor wasunable to obtain sufficient appropriate evidence on the beginninginventories, it would be necessary to issue either a qualified ordisclaimer of opinion on the income statement and statement of cashflows as well as the beginning of the balance sheet. The choice ofa qualified or disclaimer opinion would depend upon materiality. Ifhighly material, then a disclaimer is the best choice. If material,then a qualified scope and opinion might be more appropriate. Anunqualified opinion could be issued for the current period balancesheet.