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lisabon 2012 [21]
3 years ago
12

Legal Services pays half of the price for a shipment of computers that remain with the seller, Digital Computers, Inc. Within te

n days, Digital becomes insolvent. Legal Services can recover the goods if
A. the computers are identified to the contract.
B. Legal Services can describe the computers.
C. Legal Services cannot obtain cover.
D. Legal Services expected to obtain the computers within those ten days.
Business
1 answer:
umka2103 [35]3 years ago
5 0

Answer:

A. the computers are identified to the contract.

Explanation:

The buyer has the  right to recover all the goods when the seller suddenly becomes insolvent. Also where the buyer wishes to receive all the goods and also a substantial prepayment is already made and then the buyer finds out the  seller has become insolvent.

Under the UCC Section 2-502, it allows the buyer to recover all the goods if the below  conditions are met:

  • the goods or the items must be identified to the contract
  • if the buyer had paid a part of the purchase price or have made full payment
  • if the buyer is willing to pay if any balance due
  • after the first installment, the seller must become insolvent.

Therefore, in the context, Legal Services can recover all the computers if the computers are identified to the contract.

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On January 23, 10,000 shares of Tolle Company are acquired at a price of $30 per share plus a $100 brokerage commission. On Apri
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Answer:

January 23rd

Dr Investment in Tolle                 300,100

Cr Cash                                        300,100

(to record the acquired of 10,000 Tolle's shares at $30 each and a brokerage cost of $100)

April 12th

Dr Cash                                 5,000

Cr Dividend Revenue          5,000

(to record dividend revenue from 10,00 Tolle's shares at $0.5 each)

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Dr Cash                                           135,900

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Cr Gain on investment disposal   15,860

(to record the sales of 4,000 Tolle's shares at $34 plus $110 commission fees incurred).

Explanation:

All the explanation is given at the end of each transaction. Further explanation as below:

Given there is no information mentioned whether the share acquired is fro 20% to above and the partial disposal of the investment comes quite near to the time of first acquire; we apply the Cost Method for accounting these transactions.

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- The actual selling price per share = (Selling price x share sold - Brokerage commission) / share sold = ( 34 x 4,000 - 100) / 4,000 = $33.975;

- The cost of share sold per share = ( Purchasing price x share purchase - Brokerage commission)/ share purchased = ( 30 x 10,000 + 100) / 10,000 = $30.01

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=> Gain on investment disposal = ( 33.975 - 30.01) x 4,000 = 15,860.

=> Cash receipt = 4,000 x 34 - 100 = $135,900.

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