Davenport Corp. sells William's Furnishings Co., $60,000 worth of couches, chairs, and lounges for William's Furnishings Co. ("WF") to sell to its customers. When Davenport Corp's trucks attempt to deliver the merchandise, they are advised by representatives from WF that they can no longer afford to pay Davenport Corp. for the order. At the time of delivery, the market value of the merchandise is $40,000. What, if anything, can Davenport sue WF to recover? $20,000 O S60,000 O $40,000

Davenport Corp. sells William's Furnishings Co., $60,000 worth of couches, chairs, and lounges for William's Furnishings Co. ("WF") to sell to its customers. When Davenport Corp's trucks attempt to deliver the merchandise, they are advised by representatives from WF that they can no longer afford to pay Davenport Corp. for the order. At the time of delivery, the market value of the merchandise is $40,000. What, if anything, can Davenport sue WF to recover? $20,000 O S60,000 O $40,000

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter16: Multistate Corporate Taxation

Section: Chapter Questions

Problem 43P

See similar textbooks

Similar questions

Denali Company manufactures household products such as windows, light fixtures, ladders, and work tables. During the year it produced 10,000 Model 10X windows but only sold 5,000 units at $40 each. The remaining units cannot be sold through normal channels. Cost for inventory purposes on December 31 included the following data on the unsold units: Denali can sell the 5,000 windows at a liquidation price of $20.00 per window, but it will incur a packaging and shipping charge of $7.50 per window. Required: Identify the relevant costs and revenues for the liquidation sale alternative. Is Denali better off accepting the liquidation price rather than doing nothing? Assume that Model 10X can be reprocessed to another size window, Model 20X, which will require the same amount of labor and overhead as was required to initially produce, but sells for only $33. Determine the most profitable course of action—liquidate or reprocess.
Fahey Company sells Stairmasters to a retailer, Physical Fitness, Inc., for $2,000,000. Fahey has a history of providing price concessions on this product if the retailer has difficulty selling the Stairmasters to customers. Fahey has experience with sales like these in the past and estimates that the maximum amount of price concessions is $300,000. Instructions a. Determine the amount of revenue that Fahey should recognize for the sale of Stairmasters to Physical Fitness, Inc. b. According to GAAP, in some situations, the amount of revenue recognized may be constrained. Explain how the accounting for the Stairmasters sales might be affected by the revenue constraint due to variable consideration or returns. c. Some believe that revenue recognition should be constrained by collectibility. Is such a view consistent with GAAP? Explain.
Tractor Co. signed a contract to sell a tractor to Green Inc. for $55,000. Green paid for the tractor, and asked Tractor to delay delivery. Identify a situation that Tractor can recognize sales revenue before delivery of the tractor to Green? Tractor has five identical tractors in stock, and did not physically set aside a tractor for Green. Instead, it tells its warehouse manager that one tractor must remain in stock for delivery to Green upon demand. Tractor moved a tractor to another warehouse and labeled it “SOLD TO GREEN CO.” It informed the warehouse manager that he must be ready to ship the tractor to Green, and prohibited him from selling the tractor to another customer or from moving the tractor out of the warehouse. Tractor moved a tractor to another warehouse and labeled it “SOLD TO GREEN CO.” It informed its warehouse manager that, he may sell the tractor only if the manager can replace Green’s tractor within 24 hours. Situation 2 Situation 1…
Southern motors (seller) agreed to sell to Mr. Bean (Buyer) a specific dump truck for 1,500,000.00 for delivery cash on delivery and the payment of the price to be made on October 15 but Mr. Bean failed to pay the price. What are the remedies of southern motors?
The Dotson Company, owner of Bleacher Mall, charges Rich Clothing Store a rental fee of $600 per month plus 5% of yearly profits over $500,000. Matt Rich, the owner of the store, directs his accountant, Ron Hamilton, to increase the estimate of bad debt expense and warranty costs in order to keep profits at $475,000. Instructions Answer the following questions. a. Should Hamilton follow his boss’s directive?. b. Who is harmed if the estimates are increased? c. Is Matt Rich’s directive ethical?
XYZ, Inc. sold 100 widgets to ABC, Inc. on 1/1/18 for $50 per widget on account. The sales agreement allows ABC to return widgets that they are unsatisfied with or exceed their needs within 30 days of the sale. The widgets cost XYZ $30 to produce. XYZ doesn’t anticipate any material cost of restocking the inventory nor any inability to resell them at $50 per unit. ABC expects that 10 widgets will be returned within the return period. Discuss the criteria for recognizing sales returns and allowances covered in the text and determine whether this arrangement meets the requirements Record the journal entry for the sale on 1/1/18. ABC returned 5 widgets on 1/18/18. Record the journal entry for this event. XYZ prepared a balance sheet on 1/31/18. Record any journal entries that they would need make prior to preparing their financial statements. Show how their accounts receivable and related accounts would be reported on that balance sheet. Show how the sales and gross profit section of…
Al's Advertising Company trades in a red vehicle which had originally cost the Company $22,000 for a blue vehicle which has a list price of $18,600. The net book value of the red vehicle is $19,000. The car dealership allows a $17,500 trade-in but Al's Advertising Company has to pay in $1,100 to make it a fair deal. The red vehicle being traded in could be sold, if it wasn't traded in, for $17,300 on the open market as a second-hand vehicle. What value should A's Advertising use to record the blue vehicle on their books? Multiple Choice $19,000 $17,300 sale price of red vehicle on the open market $18,600 list price $18,100 $18,400
RM Company, owner of RM Mall, charges Hope Clothing Store, a rental fee of P60, 000 per month plus 5% yearly profits over P5, 000,000. Jacob, the owner of the store, directs his accountant Jun Reyes, to increase the estimate of bad debt expense and warranty costs in order to keep profits at P4, 750,000. Instructions:Should Jun Reyes follow his boss’ directive? Who is harmed if the estimates are increased?
BM Motors, Inc. employs 40 sales personnel to market its line of luxury automobiles. Theaverage car sells for P1,200,000 and a 6% commission is paid to the salesperson. BM Motorsis considering a change to a commission arrangement that woul d pay each salesperson a salaryof P24,000 per month plus a commission of 2% of the sales made by that salesperson.The amount of total car sales at which BM Motors would be indifferent as to which plan to selectis A. P22,500,000 C. P24,000,000B. P30,0 00,000 D. P12,000,000
The list price of a secondhand van was P300,000 at a local car dealership. However, a customer convinced the dealer to sell the van for P250,000 (the van had cost the dealer P200,000). The amount of revenue that would be recognized as a result of the sale is:
Sunland, Inc. is a distributor of prepaid telephone cards to customers in its convenience stores. When Sunland sells the cards, it then pays the telecommunications company, TeleExpress, less a commission of 20 percent of the selling price to customers. Sunland receives $4,200 in cards in January 2020. Sunland sold 45% of the cards in February, 30% in March, and 25% in April. It costs TeleExpress $3,000 to provide the telephone service on the cards sold by Sunland.Indicate how much income Sunland should recognize in January, February, March, and April.
Coby is plumber who engages Peter to buy materials on his behalf. Peter is given a limit of $1,500 on purchases that he makes on Coby’s behalf. U-Bend Pty Ltd is a wholesaler of PVC piping from whom Peter has purchased pipes before . The company was selling piping at a discount price. Peter purchase a quantity of this piping for $2,000 and arranged for delivery. Peter thought it was too good a deal to pass up, even though it was in excess of his limit of $1,500 . Coby is refusing to accept the delivery of the pipes from U- Bend Pty Ltd Under Agency Law, will Coby be bound by the purchase?