Fact Pattern 4-1 You Own Priscilla's Pecans. You Employ Five People and Sell

question 317

Multiple Choice

Fact Pattern 4-1
You own Priscilla's Pecans. You employ five people and sell your pecan products in one town in Georgia. Your products are not sold in any other state.
The federal government imposes regulations on the pecan industry. The Georgia legislature issues its own safety laws that are stricter than the federal rules. Georgia also places a tax on pecan products made out-of-state because it fears those products will not be as safe as those produced in Georgia under the strict Georgia regulations.
The regulations raise the cost of doing business. To register your unhappiness with the Georgia regulations you attach a label to your products that alerts customers to the rules and expresses your view that the rules are unnecessary and too costly. You donate $10,000 to the campaign of Lucinda Snopes, a friend who is running for the legislature. She opposes the pecan law.
Buddy Reeves, the county attorney, reads the label criticizing the new safety regulations. He draws up a complaint against you and against Priscilla's for distributing inflammatory statements in commerce. He instructs the sheriff to seize your products in order to stop distribution of your statement, which the sheriff does. You contact attorney Travis Shifflett and ask him to represent you.
-Refer to Fact Pattern 4-1. Georgia may pass pecan regulations for Georgia producers that are stricter than the federal regulations so long as:

• A) the state regulations do not conflict with the intent of the federal regulations
• B) the state regulations are constitutional
• C) the state regulations do not impede interstate commerce
• D) all three of the specific choices are correct
• E) none of the other choices are correct

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Definitions:

Stockholders' Equity

The residual interest in the assets of a corporation after deducting its liabilities, representing the ownership interest of shareholders.

Equity Securities

Financial instruments representing ownership in a company, such as stocks, which provide a claim to a portion of the company's profits and assets.

Market Prices

The current value at which an asset or service can be bought or sold in a marketplace.

Carrying Value

Carrying Value, also known as book value, is the value of an asset as it appears on a balance sheet, calculated by netting the asset against its accumulated depreciation.