King Electronics, a retailer of video equipment, sold two DVRs to Larson, a psychologist, for use in her professional practice, which was located in her home. The sale to Larson was made on credit. King retained a security interest in the DVRs sold but
did not file a financing statement. Mills, another creditor of Larson, has asserted that his lien on the two DVRs is superior to King's security interest. Is he right? As you decide, remember to classify the DVRs as collateral in the hands of King and Larson.
Judgment will be for Mills. The DVRs are inventory in the hands of King and equipment in the hands of Larson. King must file a financing statement to perfect its security interest in the DVRs. Because of King's failure to file a financing statement covering the two DVRs sold to Larson on credit, Mills has a right that is superior to King's right in the collateral.
You might also like to view...
When using the direct method, how is the sale of long-term investments for cash reported on the statement of cash flows?
a. Operating activity b. Investing activity c. Financing activity d. Noncash investing and financing activity
Resorto, a European country, exported sugar worth $600 million between 2015 and 2016 and imported tea worth $750 million during the same period. In this scenario, Resorto most likely had a _____ between 2015 and 2016.
A. trade deficit B. balance of payments surplus C. trade surplus D. balance of payments deficit
It is not possible to have too much insurance coverage
Indicate whether the statement is true or false.
Which of the following statements is true of a company that is in the second stage of developing a global business?
A. It maintains a virtual executive suite. B. It sets up foreign subsidiaries to handle sales in one country. C. It runs its business entirely through the Internet. D. It bases its entire operations in its home country.