[jeff]

Free Study Planner, Notes, Audio, Flashcards: https://www.another71.com/cpa-exam-study-plan/

Free CPA Exam Survival Guide: https://www.another71.com/cpa-exam-survival-guide/

[REGTaker]

Mine never had all 3 by himself until the littlest was at least a year old. Hahaha. he doesn't know what to do with babies except put them down for naps.

[Anonymous]

I'm writing it all down and talking to myself (I probably sound crazy, but I don't care).

[REGTaker]

I think it's D. I think it can be written or oral, implied or expressed, that the goods will do what they are intended for.

[Anonymous]

Mine takes me for granted with the kids. He's always telling me “how hard can they be?” until he has to watch all 3. They are awesome, and I can't imagine life without them, but they are a lot to handle all together. Especially with school and all the extras that come with that.

[REGTaker]

And they're BOYS! Mine jump off the sofa. I bet yours are climbing walls!

[Anonymous]

You are correct – it is D! I thought it was C because of the “as is” but forgot those were disclaimers. Duh.

[Anonymous]

I caught my youngest climbing onto the top shelf of a closet when he was 18 months old. He was just sitting up there – I had walked away to use the restroom, so I was gone 3 minutes, tops. They are nuts. And my middle one has some speech/hearing issues, which makes everything worse.

[Anonymous]

Dart Inc., a closely held corporation, is petitioned involuntarily into bankruptcy under the liquidation provisions of Chapter 7 of the Federal Bankruptcy Code. Dart contests the petition.

Dart has not been paying its business debts as they become due, has defaulted on its mortgage-loan payments, and owes back-taxes to the IRS. The total cash value of Dart's bankruptcy estate after the sale of all assets and payment of administration expenses is $100,000.

Dart has the following creditors:

– Fracon Bank is owed $75,000 principal and accrued interest on a mortgage loan secured by Dart's real property. The property was valued at and sold, in bankruptcy, for $70,000.

– The IRS has a $12,000 recorded judgment for unpaid corporate income tax.

– JOG Office Supplies has an unsecured claim of $3,000 that was filed in timely fashion.

– Nanstar Electric Co. has an unsecured claim of $1,200 that was not filed in a timely fashion.

– Decoy Publications has a claim of $14,000, of which $2,000 is secured by Dart's inventory that was valued and sold, in bankruptcy, for $2,000. The claim was filed in a timely fashion. Assume that the bankruptcy estate was distributed.

What total dollar amount would Fracon Bank receive on its secured and unsecured claims?

A. $70,000

B. $72,000

C. $74,000

D. $75,000

[REGTaker]

My 1 year old can beat up her sisters. It's a little sad really. They are all so sweet individually. You put them together and BOOM. Dynamite goes off!

[Anonymous]

Ahahahaha!!! That sounds familiar!

[REGTaker]

I think the bank gets everything they are owed. So D-$75K

[Anonymous]

That's what I thought, since they are secured creditors, but it's C – Of the $100,000, the first $70,000 will go to Fracon Bank, as that money was generated by the sale of the house in which they had a security interest. This leaves Fracon with an additional $5,000 in general debt. The next $2,000 will similarly go to Decoy as money raised from the sale of their security interest. This leaves $28,000. The next $12,000 will go to the IRS to satisfy their recorded judgment, leaving $16,000. All taxes are paid before general creditors are paid. The final $16,000 is divided pro rata among remaining creditors, since there is not enough to pay all of them in full. However, all general creditors who have filed a claim in a timely fashion must be fully repaid before those who have not filed in a timely fashion are paid anything. So, we have $20,000 of total general creditors' claims, and $16,000 to pay them. Each will take 80% of their unsecured claims. Fracon will take 80% of $5,000, or $4,000. This will be added to the $70,000 already received, to get the total of $74,000.

[REGTaker]

OK. I get that. Thanks.

[Anonymous]

Webstar Corp. orally agreed to sell Northco, Inc. a computer for $20,000. Northco sent a signed purchase order to Webstar confirming the agreement. Webstar received the purchase order and did not respond. Webstar refused to deliver the computer to Northco, claiming that the purchase order did not satisfy the UCC Statute of Frauds because it was not signed by Webstar. Northco sells computers to the general public, and Webstar is a computer wholesaler.

Under the UCC Sales Article, Webstar's position is

A. Incorrect because it failed to object to Northco's purchaser order.

B. Incorrect because only the buyer in a sale-of-goods transaction must sign the contract.

C. Correct because it was the party against whom enforcement of the contract is being sought.

D. Correct because the purchase price of the computer exceeded $500.

[REGTaker]

A

[Author]

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