A security contract entered into for a period of 3 years was revoked because of an impled flaw in the contract. The court ruled that the total contract price had to be paid The contract price received by the recipient should be treated as AI 1 Capital because it was received in a lump sum 8 11 Assessable income because it was an amount received to replace loss of earnings CI 1 A windtall gain becauso the company was not expecting the payment D I 1 An exempt income because no services were provided

A security contract entered into for a period of 3 years was revoked because of an impled flaw in the contract. The court ruled that the total contract price had to be paid The contract price received by the recipient should be treated as AI 1 Capital because it was received in a lump sum 8 11 Assessable income because it was an amount received to replace loss of earnings CI 1 A windtall gain becauso the company was not expecting the payment D I 1 An exempt income because no services were provided

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

A security contract entered into for a period of 3 years was revoked because of
an impled flaw in the contract. The court ruled that the total contract price had
to be paid The contract price received by the recipient should be treated as A I
1 Capital because it was received in a lump sum 8 11 Assessable income
because it was an amount received to replace loss of earnings CI 1 A windtall
gain becauso the company was not expecting the payment D I 1 An exempt
income because no services were provided

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