Johnson tells Davis that he paid $150,000 for his farm in 2013 and that he believes it is worth twice that at the present time. Relying upon these statements, Davis buys the farm from Johnson for $225,000. Johnson did pay $150,000 for the farm in 2013, but its value has increased only slightly, and it is presently not worth $300,000. On discovering this, Davis offers to reconvey the farm to Johnson and sues for the return of his $225,000. Result? b. Modify the facts in (a) by assuming that Johnson had paid $100,000 for the property in 2013. What result?
Johnson tells Davis that he paid $150,000 for his farm in 2013 and that he believes it is worth twice that at the present time. Relying upon these statements, Davis buys the farm from Johnson for $225,000. Johnson did pay $150,000 for the farm in 2013, but its value has increased only slightly, and it is presently not worth $300,000. On discovering this, Davis offers to reconvey the farm to Johnson and sues for the return of his $225,000. Result? b. Modify the facts in (a) by assuming that Johnson had paid $100,000 for the property in 2013. What result?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Johnson tells Davis that he paid $150,000 for his farm in 2013 and that he believes it is worth twice that at the present time. Relying upon these statements, Davis buys the farm from Johnson for $225,000. Johnson did pay $150,000 for the farm in 2013, but its value has increased only slightly, and it is presently not worth $300,000. On discovering this, Davis offers to reconvey the farm to Johnson and sues for the return of his $225,000. Result? b. Modify the facts in (a) by assuming that Johnson had paid $100,000 for the property in 2013. What result?
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