Ames, an agent for Baker Antiques, had authority to purchase early 20th-century American furniture costing a maximum of $1500 per piece. Ames bought a 19th-century French desk for $3000 from Carter. Baker was furious when she saw the desk, and fired Ames. Nevertheless, she put the desk on display in the shop with a $5000 price tag. When the best offer she got on the desk was $2500, Baker returned the desk to Carter. Baker told Carter that Ames had exceeded his authority in purchasing the desk, and she demanded that Carter refund the $3000 that Ames had paid for the desk.Will Carter have to refund the money? Explain why or why not.Was Ames wrongfully discharged? Explain why or why not. [Note: There is no graph or diagram in the image.]

An administration charge or fee is a cost associated with the opening, maintaining, altering, or…

Answered: Ames, an agent for Baker Antiques, had…

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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Sullivan Software sells packages of a software program and one year's worth of technical support for $500. Its packaging lists the $500 sales price as comprised of a software program and technical support. All of Sullivan's sales are for cash, and there are no returns. Sullivan sells the software program separately for $475 and offers a year of technical support separately for $75. Sullivan should recognize revenue for the two parts of the arrangement as follows: Defer the entire $500 and recognize over the support period. O Recognize the portion of the $500 attributable to the software program when the customer pays cash to buy the package; defer the portion attributable to technical support and recognize over the support period. Recognize the entire $500 when the customer pays cash to buy the package. Recognize the entire $500 upon conclusion of the support period.
Gordon operates the Tennis Pro Shop in Blacksburg, Virginia. The Shop sells, manufacturers, and customizes tennis racquets for serious amateurs. Virginia has a 5 percent sales tax. Assume that a District of Columbia customer picks up a $2,000 racquet order in the Blacksburg store and drives it back to the District of Columbia (where the sales tax rate is 8.5 percent). The Shop has no sales personnel or property in District of Columbia. a. Determine the total sales and use tax that the Shop must collect from the customer. b. Determine the total sales and use tax that the customer must pay.
Electronics, Inc. is a high-volume, wholesale merchandising company. Most of its inventory turns over four or five times a year. The company has had 50 units of a particular band of computers on hand for over a year. These computers have not sold and probably will not sell unless they are discounted 60 to 70%. The accountant is carrying them on the books at cost and intends to recognize the loss when they are sold. This way, she can avoid a significant write-down in inventory on the current year's financial statements. Is the accountant correct in her treatment of the inventory? Why or why not? can you help me explain this?
On Feb. 5, 20x2, an employee filed a P 2,000,000 lawsuit against Steel Co. for damages suffered when one of the Steel's plants exploded on Dec. 29, 20x1. Steel's legal counsel expects the company will lose the lawsuit and estimates the lost to be between P 500,000 and P 1,000,000. The employee has offered to settle the lawsuit out of the court for P 900,000, but Steel will not agree to the settlement. In its Dec. 31, 20x1 balance sheet, what amount should Steel report as a liability from lawsuit?a. P 500,000b. P 900,000c. P 1,000,000d. P 2,000,000
Ms. T. Potts, the treasurer of Ideal China, has a problem. The company has just ordered a new kiln for $496,000. Of this sum, $62,000 is described by the supplier as an installation cost. Ms. Potts does not know whether the Internal Revenue Service (IRS) will permit the company to treat this cost as a tax-deductible current expense or as a capital investment. In the latter case, the company could depreciate the $62,000 straight-line over 5 years. The tax rate is 30% and the opportunity cost of capital is 5%. a. What is the present value of the cost of the kiln if the installation cost is treated as a separate current expense?b. What is the present value of the cost of the kiln if the installation cost is treated as a part of the capital investment? (Round your answer to the nearest whole dollar amount.)
Nancy, Inc. purchased a long-haul truck from Sebring Trucks for $300,000. Nancy paid $1,360 freight for delivery of the truck and $8,600 to install radio and computer equipment in the truck. The truck driver went to a special school (at no charge to Nancy) to learn the computer technology. This training would have cost $2,400 if Nancy had not bought new radio and computer equipment. The state charged a 5% sales tax on the truck's invoice price. What is the capitalized cost of the truck? $300,000 $308,600 $317,200 $324,960
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
Mr. Don is the director of A-Design Inc., a federally incorporated company in Canada, specializing in the design and manufacturing of armrests for the wheelchair industry.A-Design invested $100,000 in aproduction machine, which has auseful life of 10 years, and put $10,000 in its bank account. In an attempt to improve company sales and profits, Mr. Don planned tooffer two purchasing options to the clients of his company Option 1:$250 deposit upfront$500 yearly fee for 5 years Option 2:$1300 deposit upfront$300 yearly fee for 3 years Assuming an interest rate of 5% per year over a period of 5 years on the money put in the bank, calculate the simple interest and the compound interest earned by A-Design at the end of the fifth year?
Ee.92.
Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Ichabod Crane, on behalf of his law firm, Crane Law, LLC., contracted with TOAD, a local radio station to create commercials. Ichabod, the sole member of the firm, helped to create the commercials. Ichabod's voice was used, and the ads used his name and experience. The ads asked potential clients to contact "defense attorney Ichabod Crane." TOAD was not paid for the airing of the advertisements. The total due was $25,000. TOAD filed a law suit against Ichabod Crane both as member of an LLC. and personally. Pending the trial TOAD filed a request for a writ of attachment. In support of the request, TOAD offered copies of the parties contracts, the transcripts of the ads, and the invoices as evidence of the debt. Ichabod claimed he could not be held personally liable for the cost of the ads. TOAD argued that Ichabod Crane had been unjustly enriched (an equitable claim) by TOAD's actions and to TOAD's detriment. Instructions: • What is the purpose of attachment? • Do you believe TOAD is…
Caplan Pharma, Inc., recently was sued by a competitor for possible infringement of the competitor’s patent on a top-selling flu vaccine. The plaintiff is suing for damages of $15 million. Caplan's CFO has discussed the case with legal counsel, who believes it is possible that Caplan will not be able to successfully defend the lawsuit. The CFO knows that current U.S. accounting guidelines require that come gencies (such as lawsuits) must be disclosed in the annual report when a loss is possible. However, she is unsure whether this rule must be applied in the preparation of interim financial statements. She also knows that disclosure is necessary only if the amount is material, but she is unsure whether materiality should be assessed in relation to results for the interim period or for the entire year. Required Search current U.S. accounting standards to determine whether contingencies are required to be disclosed in interim reports, and, if so, how materiality is to be determined.…

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