Question
In: Accounting
Your client, Wholesaler, sold a large number of freezers to Retailer on credit. This occurred on...
Your client, Wholesaler, sold a large number of freezers to Retailer on credit. This occurred on May 1, 2017. Wholesaler had purchased these freezers from Manufacturer on March 1, 2017. Manufacturer had purchased the components from Supplier on November 1, 2016. Assume that each transaction is a credit sale and that every creditor timely filed a UCC-1 such that they are secured parties.
A. Draw the picture of each and every transaction and explain each of these transactions under Article 9 of the UCC.
B. Now assume that Cindy bought a freezer for her house from Retailer on May 15, 2017. Retailer filed the UCC-1 on July 1, 2017. Cindy sold that freezer to her friend, Cool Girl, on January 5, 2018. Cool Girl was paying Retailer for the debt in Cindy’s name until Cool Girl lost her job on March 1, 2018. Cool Girl has not made a payment since but he has not told Cindy about this either. What are Retailer’s rights as to this freezer? Would that change if Retailer did not file a UCC-1? Why or why not?
C. Assume that Supplier never filed when it sold to Manufacturer. Manufacturer files for Chapter 7 bankruptcy on January 5, 2017 and Manufacturer had not paid Supplier at that time. What are Supplier’s rights and remedies? What is the likely result for Supplier in this Chapter 7 bankruptcy since Supplier never filed?
Solutions
ekkarill92 answered 2 years agoRelated Solutions
Your client, Wholesaler, sold a large number of freezers to Retailer on credit. This occurred on...
Your client, Wholesaler, sold a large number of freezers to
Retailer on credit. This occurred on May 1, 2017. Wholesaler had
purchased these freezers from Manufacturer on March 1, 2017.
Manufacturer had purchased the components from Supplier on November
1, 2016. Assume that each transaction is a credit sale and that
every creditor timely filed a UCC-1 such that they are secured
parties.
A. Now assume that Cindy bought a freezer for her house from
Retailer on May 15, 2017....
Your client, Winston, sold a large number of freezers to Rita on credit. This occurred on...
Your client, Winston, sold a large number of freezers to Rita on
credit. This occurred on May 1, 2017. Winston had purchased these
freezers from Manny on March 1, 2017. Manny had purchased the
components from Supplier on November 1, 2016. Assume that each
transaction is a credit sale and that every creditor timely filed a
UCC-1 such that they are secured parties.
A. Draw the picture of each and every transaction and explain
each of these transactions under Article...
Your client, Winston, sold a large number of freezers to Rita on credit. This occurred on...
Your client, Winston, sold a large number of freezers to Rita on
credit. This occurred on May 1, 2017. Winston had purchased these
freezers from Manny on March 1, 2017. Manny had purchased the
components from Supplier on November 1, 2016. Assume that each
transaction is a credit sale and that every creditor timely filed a
UCC-1 such that they are secured parties.
B. Now assume that Cindy bought a freezer for her house from
Rita on May 15, 2018....
Problem 16-04 Cost of Trade Credit A large retailer obtains merchandise under the credit terms of...
Problem 16-04
Cost of Trade Credit
A large retailer obtains merchandise under the credit terms of
3/20, net 45, but routinely takes 50 days to pay its bills.
(Because the retailer is an important customer, suppliers allow the
firm to stretch its credit terms.) What is the retailer's effective
cost of trade credit? Assume 365 days in year for your
calculations. Do not round intermediate calculations. Round your
answer to two decimal places.
%?
Problem 16-04 Cost of Trade Credit A large retailer obtains merchandise under the credit terms of...
Problem 16-04
Cost of Trade Credit
A large retailer obtains merchandise under the credit terms of
2/15, net 45, but routinely takes 60 days to pay its bills.
(Because the retailer is an important customer, suppliers allow the
firm to stretch its credit terms.) What is the retailer's effective
cost of trade credit? Assume 365 days in year for your
calculations. Do not round intermediate calculations. Round your
answer to two decimal places.
Shane Whitebone is getting to know his new client, Clarrie Potters, a large discount electrical retailer....
Shane Whitebone is getting to know his new client, Clarrie
Potters, a large discount electrical retailer. Ben Brothers has
been the engagement partner on the Clarrie Potters’ audit for the
past five years, but the audit partner rotation rules have meant
that the engagement partner has had to change this year. Shane
discovers that toward the end of last year, Clarrie Potters
installed a new IT system for inventory control. The system was not
operating prior to the end of...
A large retailer obtains merchandise under the credit terms of 1/10, net 35, but routinely takes...
A large retailer obtains merchandise under the credit terms of
1/10, net 35, but routinely takes 55 days to pay its bills.
(Because the retailer is an important customer, suppliers allow the
firm to stretch its credit terms.) What is the retailer's effective
cost of trade credit? Assume a 365-day year. Do not round
intermediate calculations. Round your answer to two decimal
places.
A large retailer obtains merchandise under the credit terms of 3/20, net 45, but routinely takes...
A large retailer obtains merchandise under the credit terms of
3/20, net 45, but routinely takes 60 days to pay its bills.
(Because the retailer is an important customer, suppliers allow the
firm to stretch its credit terms.) What is the retailer's effective
cost of trade credit? Assume 365 days in year for your
calculations. Do not round intermediate calculations. Round your
answer to two decimal places.
A large retailer obtains merchandise under the credit terms of 1/15, net 30, but routinely takes...
A large retailer obtains merchandise under the credit terms of
1/15, net 30, but routinely takes 50 days to pay its bills.
(Because the retailer is an important customer, suppliers allow the
firm to stretch its credit terms.) What is the retailer's effective
cost of trade credit? Assume a 365-day year. Do not round
intermediate calculations. Round your answer to two decimal
places.
A large retailer obtains merchandise under the credit terms of 3/10, net 30, but routinely takes...
A large retailer obtains merchandise under the credit terms of
3/10, net 30, but routinely takes 60 days to pay its bills.
(Because the retailer is an important customer, suppliers allow the
firm to stretch its credit terms.) What is the retailer's effective
cost of trade credit? Assume 365 days in year for your
calculations. Do not round intermediate calculations. Round your
answer to two decimal places.
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