Susie Has a Great Farm Bordering on a River and Plans

question 56

Multiple Choice

Susie has a great farm bordering on a river and plans to build a house on a cliff overlooking the water.She was also considering building a couple of guest cottages to rent to vacationers.One day a land conservatory came to Susie and asked her to designate the land as a pristine area whereby no development or building could take place.Susie told them to get lost.The next thing she knew,the jurisdiction in which she lived had passed a regulation permanently prohibiting riverfront owners in her area from building any structures within one half mile of the river.There had been no such restriction in her state or county previously,and Susie suspects that the regulation is part of a plot to force landowners to agree to the request of the land conservatory.Susie tells her builder to go ahead with plans to construct the home because the government cannot take land through excessive regulation.Is Susie correct that the government cannot take land through excessive regulation?

• A) Susie is incorrect although if the government action constitutes a taking, compensation to the landowner must be provided.
• B) Susie is incorrect, and no compensation to the landowner is required.
• C) Susie is incorrect although she would only be entitled to compensation for any lost profits she can establish.
• D) Susie is correct, and the regulation would be overturned by a federal court.

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Definitions:

Percent of Sales Method

A financial forecasting model that estimates changes in balance sheet accounts by using a fixed percentage of projected sales.

Uncollectible Expenses

Expenses recognized from debts or receivables that are deemed uncollectible and written off as a loss.

Credit Sales

Sales made on credit, allowing the customer to pay at a later date, typically generating accounts receivable.

Credit Balance

A situation in an account where the total credits exceed the total debits, indicating a positive balance or amount owed to that account.