James Smith, a Health Inspector for the State of Missouri

question 21

Essay

James Smith, a health inspector for the state of Missouri, inspected a restaurant owned by Salley Slick. Smith found numerous health violations in the restaurant and fined Slick accordingly. When Smith notified Slick of the infractions, Smith strongly suggested that $5,000 "would sure prove handy in the Spring" when he planned to purchase a new fishing boat. Slick understood Smith's obvious hint and offered Smith $5,000 if he would lose the paperwork concerning the failure of the restaurant to meet proper inspection guidelines. Smith accepted the $5,000 and lost the paperwork. One month later, Smith returned to the restaurant and told Slick that he would reappear every month and find violations unless Slick produced $1,000 each month to go toward the purchase of a fleet for Smith. Slick agreed to make the $1,000 payments. What crimes have been committed by Smith and Slick?

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Definitions:

Dividend Reinvestment Scheme

A plan offered by a corporation that allows investors to reinvest their cash dividends by purchasing additional shares or fractional shares on the dividend payment date.

Cash Equivalents

Short-term, highly liquid investments that are readily convertible to known amounts of cash and close to their maturity.

Basis of Measurement

The specific basis chosen to measure various types of assets, liabilities, income, and expenses, such as historical cost, fair value, and amortized cost.

Accrual

An accounting method that records revenues and expenses when they are incurred, regardless of when cash transactions occur.