Molly,a Non-Merchant,is at a Boat Store and Orally Agrees to Purchase

question 58

Multiple Choice

Molly,a non-merchant,is at a boat store and orally agrees to purchase a sailboat for $2,000.Molly sends a written confirmation to the boat dealer the next day describing all relevant terms of their agreement.There is no response from the store.When Molly goes to the store a week later to pick up the boat,the store refuses to sell the boat for $2,000.Which is true regarding whether the Statute of Frauds has been satisfied?

• A) This Statute of Frauds has not been satisfied.
• B) This Statute of Frauds has been satisfied because the boat dealer did not object to the written confirmation.
• C) This Statute of Frauds has been satisfied if $2,000 is a reasonable price for the boat.
• D) This Statute of Frauds has been satisfied because the boat dealer is a merchant.
• E) The firm offer rule would require the boat to be sold at the offered price of $2,000 in order for the Statute of Frauds to be satisfied.

---

Definitions:

Significant Influence

The power to participate in the financial and operating policy decisions of an investee, but not control those policies, typically associated with owning a significant but not majority share of the investee.

Fair Value

The price that would be received for the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Book Value

The net value of an asset or liability recorded on the balance sheet, determined by subtracting its accumulated depreciation or amortization from its original cost.

Equity Method

An accounting technique used to record the investments in other companies where the investor has significant influence but does not have full control.