Homegrown Gardens, LLP, is a $10 million nursery and garden retailer in Florida. Homegrown employs about 20 full-time and seasonal employees. The major- ity of the plants and nursery stock that...

Homegrown Gardens, LLP, is a $10 million nursery and garden retailer in Florida. Homegrown employs about 20 full-time and seasonal employees. The major- ity of the plants and nursery stock that Homegrown sells comes from Monromio Nurseries, a wholesaler based in Alabama. Monromio is recognized throughout the South for the quality of the plants it grows and sells. Homegrown is generally happy to pay the premium prices that Monromio’s plants command, because it passes the extra costs on to its customers, who value the high-quality plants it sells. However, Barry Green- stem, one of Homegrown’s managing partners, is visi- bly upset after speaking with the owners of othernurseries at a recent trade show in Atlanta. Although Monromio has increased its prices across the board, Monromio’s price hike to Homegrown is larger than the average. Barry suspects that Betty Stevenson, Homegrown’s assistant manager in charge of purchas- ing nursery stock, may be accepting kickbacks from Monromio in return for allowing higher purchase prices. Betty and her husband, Mike, purchased a new SUV, a houseboat, and several ATVs last year and moved into a new, larger house this year. Barry knows that Betty’s salary isn’t high enough to support the new lifestyle, and he doubts that Mike’s job as a city em- ployee would provide large enough raises to justify the new “toys.” Barry hires you to perform a net worth investigation of Betty and Mike to determine the amount of any unknown income. Your search of public and private records reveals the following information:

Assets: $70,000 $70,000 $200,000 Personal residence Automobiles 15,000 45,000 45,000 Houseboat 30,000 30,000 ATVs 12,000 12,000 Liabilities: Mortgage balance 35,000 30,500 100,000 Auto loan 2,500 Loan on 15,000 11,000 houseboat Income: Betty’s salary 25,000 25,500 26,000 Mike’s salary 35,000 36,000 37,000 Expenses: Mortgage 4,500 4,500 13,000 payments Auto payments 1,800 1,800 Houseboat 2,400 2,400 payments Other living 15,000 17,000 15,000 expenses