Tracy Company Reports the Following in Its Statement of Cash

question 27

Multiple Choice

Tracy Company reports the following in its statement of cash flows:
$\begin{array}{lr}\text { Net income } & \$ 1,000 \\\text { Depreciation and amortization } & 350 \\\text { Decrease (Increase) in accounts receivable } & (10) \\\text { Decrease (Increase) in inventory } & 200 \\\text { Decrease (Increase) in prepaid expenses } & 80 \\\text { Increase (Decrease) in trade payables } & (300) \\\text { Increase (Decrease) in taxes payable } & 75 \\\text { Cash flow from operations } & \$ 1.395\end{array}$

-If Tracy shows cost of goods sold of $2,050 on its income statement, cash paid to suppliers is:

• A)$1,550.
• B)$1,950.
• C)$2,150.
• D)$2,650.

Comprehend the effect of the principal's death on the agent's authority as per the Third Restatement.

Understand the requirements for giving actual notice to terminate an agent's authority.

Learn the situations in which an agent can act on behalf of the principal and their liability in contracts.

Recognize the principle of ratification and its requirements.

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Definitions:

Knock-Out Rule

A principle in contract law that resolves conflicts in standard form contracts (often in international trade) by nullifying conflicting terms and substituting them with terms of a neutral nature.

Gap-Filling

Refers to the method used by courts or parties to resolve ambiguities or omissions in contracts, often by applying standard provisions or reasonable interpretations.

Presumptions

Beliefs or assumptions accepted as true on the basis of probabilities without direct evidence or proof.

Mailbox Rule

A legal principle that an offer is considered accepted once the acceptance is dispatched by the offeree, not when it is received by the offeror.