Community Hospital in Atlanta entered into a contract to buy delicate lab equipment from D & D Company in Denver. The contract states shipping terms as FOB, Denver. While in transit the equipment was damaged beyond repair by the carrier, Fly-by-Nite Air Lines. The carrier is in weak financial condition and refused to pay for the equipment. In this case:
A) D & D Company must replace the equipment at no cost to the hospital.
B) Community Hospital has risk of loss.
C) D & D Company and Community Hospital will share the loss equally.
D) risk of loss will depend on which party chose Fly-by-Nite as the carrier.
B
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A merchant establishment operated by a concern that is engaged primarily in buying, taking title to, usually storing and physically handling goods in large quantities, and reselling the goods to retail or to industrial or business users is known as
wholesaler. Indicate whether the statement is true or false
Marks Corporation has two operating departments, Drilling and Grinding, and an office. The three categories of office expenses are allocated to the two departments using different allocation bases. The following information is available for the current period: Office ExpensesTotal Allocation BasisSalaries$30,000 Number of employeesDepreciation 20,000 Cost of goods soldAdvertising 40,000 Net sales ItemDrilling Grinding TotalNumber of employees 1,000 1,500 2,500 Net sales$325,000 $475,000 $800,000 Cost of goods sold$75,000 $125,000 $200,000 The amount of the total office expenses that should be allocated to Drilling for the current period is:
A. $45,000. B. $35,750. C. $600,000. D. $54,250. E. $90,000.
Which one of the following items is not required to be disclosed for each operating segment?
A. Products and services from which each segment derives its revenues. B. Factors used to allocate company-wide expenses. C. Factors used to identify operating segments. D. Revenues from transactions with other operating segments. E. Revenues from external customers.
Tan Corporation desires to set up a manufacturing facility in the western part of the United States. After considerable negotiations with Butte, Montana, Tan accepts the following offer: land (fair market value of $4.5 million) and cash of $1.5 million
a. How much income, if any, must Tan recognize? b. What basis will Tan Corporation have in the land? c. Within one year of the contribution, Tan purchases equipment for $1.6 million. What basis will Tan have in the equipment?