Sean has a six-year-old car that he bought two years ago directly from its original owner. Eight
months ago he received a recall notice about a safety problem with the brakes. He never
responded to the notice.
Yesterday Sean was driving when the brakes failed and caused him to
strike and injure a pedestrian. Which of the following is true in lawsuits against the car's
manufacturer?
A) The pedestrian cannot recover because the correction of a defect defense will apply even
though Sean did not take the car in for the repair.
B) Sean can recover despite having received the recall notice.
C) The pedestrian could not recover due to assumption of the risk.
D) The pedestrian cannot recover due to the fact that the pedestrian was not using the car.
A
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The primary objective of external auditors is to provide assurance to stockholders and other users that the statements are fairly presented
a. True b. False Indicate whether the statement is true or false
Which of the following will be listed in the operating section of the statement of cash flows that is prepared using the indirect method?
A) collections from customers B) payments to suppliers C) interest received D) increases/decreases in current liabilities
Perry Company has a tax rate of 30 percent and is considering a capital project that will make the following annual contribution to operating income before income taxes: Cash revenues $250,000 Cash expenses (150,000) Depreciation (75,000) Operating income before income taxes $25,000 The impact of income taxes on net cash flows will be
A) $(7,500). B) $(22,500). C) $(45,000). D) $(75,000).
In January, Fanning Corporation entered into a contract to acquire a new machine for its factory. The machine, which had a cash price of $400,000, was paid for as follows: Down payment .......................................... $ 30,000 Note payable in 1 . equal monthly installments ......... 240,000 1,000 shares of Hunter common stock with an agreed value of $50 per share
.............................. 50,000 Total ................................................. $320,000 Prior to the machine's use, installation costs of $10,000 were incurred. The machine has an estimated useful life of ten years and an estimated salvage value of $10,000 . What should Hunter record as depreciation expense for the first year under the straight-line method? a. $38,100 b. $39,100 c. $40,000 d. $41,000