Miller Has a Contract to Sell 1,000 Bushels of Wheat

question 9

Multiple Choice

Miller has a contract to sell 1,000 bushels of wheat to a bakery.The wheat is stored in a grain elevator and has become infested with insects.Miller is:

• A) discharged from performance because of impossibility if he doesn't have other wheat to substitute.
• B) discharged because of frustration.
• C) not discharged,but must substitute wheat or pay damages to the bakery for breach of contract.
• D) discharged if he can prove that he did not cause the damages to his wheat.

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Definitions:

Gain on Sale

The financial benefit that occurs when the selling price of an asset exceeds its original purchase price.

Loss on Sale

Loss on Sale occurs when the selling price of an asset is less than its carrying amount on the books, resulting in a financial loss.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded against a fixed asset since it was acquired, representing its decrease in value.

Gain on Sale

The profit earned from selling an asset for more than its book value or purchase price.