Answer:
There is no contract since both Helen and Garth made a mutual mistake.
In contract law, a mutual mistake occurs when all the parties involved (Helen and Garth) are mistaken about important material facts that affect the contract (which ATV is being sold). The parties intend to perform but what they consider being part of the contract is not what the other party considers part of the contract. When both parties make a mutual mistake, the contract is cancelled.
Mutual mistakes are not on purpose, they are mistakes committed in good faith.
Answer:
Rent expense of $2,000
Prepaid rent of $22,000
Explanation:
Since we were told that On November 1,2019 Movers Inc., paid the amount of $24,000 for a 2 years' rent which will start or begin on November 1 which means Movers' year-end financial statements as of December 31,2019 will show:
Rent expense of $2,000
Prepaid rent of $22,000
The rent expense of $2,000 is calculated as
(1÷12*$24,000)=$2,000
The prepaid rent of $22,000 is calculated as
$24,000-$2,000
$22,000
Answer:
31 December 2019
Cash 19000 Dr
Accumulated depreciation 12186 Dr
Equipment 27419 Cr
Gain on disposal 3767 Cr
Explanation:
Straight line depreciation method charges a constant depreciation expense through out the useful life of the asset.
To calculate the gain or loss on disposal/sale of an asset like this, we need to first determine the book value or carrying value of asset on that day.
Carrying value = Cost - Accumulated depreciation
Carrying value = 27419 - 12186
Carrying value = $15233
Gain or (loss) on disposal = Cash/Sale proceeds - Carrying Value
Gain or (loss) on disposal = 19000 - 15233
Gain or (loss) on disposal = $3767 Gain
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