On June 1, 2014, Penny Corp

question 82

Multiple Choice

On June 1, 2014, Penny Corp. sold merchandise with a list price of $50,000 to Linn on account. Penny allowed trade discounts of 30% and 20%. Credit terms were 2/15, n/40 and the sale was made F.o.b. shipping point. Penny prepaid $1,000 of delivery costs for Linn as an accommodation. On June 12, 2014, Penny received from Linn a remittance in full payment amounting to

• A) $27,440.
• B) $28,420.
• C) $28,440.
• D) $27,990.

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Definitions:

General Sales Agent

An individual or company authorized to sell or distribute a manufacturer's products in a specific area or market.

Express or Implied Authority

Power granted by a principal to an agent, which can be explicitly stated (express) or inferred from actions, circumstances, or job title (implied).

Disclosed Principal

In the realm of agency law, a principal whose identity the third party is aware of when the agent enters into a contract with that third party.

Unauthorized Contract

An agreement made by someone who does not have the legal right or power to do so on behalf of another person or entity.