On June 1,Supertread Tire Company Entered into a Contract to Provide

question 30

Multiple Choice

On June 1,Supertread Tire Company entered into a contract to provide 100 tires per month to ZYX Cycle Company at $30 per tire for the next two years.The October shipment consisted of 100 badly defective tires.ZYX Cycle Company:

• A) can treat the whole contract as breached.
• B) can reject the October shipment if it cannot be cured in a timely manner by Supertread.
• C) cannot reject the October shipment since it is part of the installment series.
• D) must sell the defective tires for whatever they can get for them and sue Supertread for the difference.

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Definitions:

Foreign Tax Credit

A tax credit that allows taxpayers to offset income taxes paid to foreign governments against their U.S. tax liabilities, to avoid double taxation of the same income.

Earned Income Credit

The Earned Income Credit (EIC) is a refundable tax credit for low- to moderate-income working individuals and families, particularly those with children, to reduce poverty and encourage work.

Nonrefundable Credit

A tax credit that can only reduce a taxpayer’s liability to zero, but unlike refundable credits, any excess is not paid out to the taxpayer.

Adoption Credit

A tax benefit offered to taxpayers to offset some costs of legally adopting a child, which can reduce tax liability.