Consignment Sale in 2014, the Following Transaction Occurred Between Seagull

question 416

Essay

Consignment sale In 2014, the following transaction occurred between Seagull Wholesale Corp.(consignor)and Bobolink Stores (consignee): On March 2, 2014 Seagull shipped merchandise costing $52,000 to Bobolink.Seagull paid $4,000 for freight and Bobolink paid $3,000 for advertising (to be reimbursed by Seagull).By the end of the third quarter of 2014 (September 30, 2014), Bobolink advised Seagull that all the merchandise has been sold for $70,000, and forwarded the proceeds (net of a 15% commission and the outlay for advertising)to Seagull. Instructions
a)Prepare all entries for Bobolink to account for this transaction.
b)Prepare all entries for Seagull to account for this transaction.

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Definitions:

Material Fact

A fact that is significant or essential to the issue or matter at hand, especially in the context of contracts or litigation.

Mistake Of Fact

An error made regarding a fact that is material to a contract, which can affect the validity of the contract if the mistaken belief was a basis for its formation.

Peerless Case

The Peerless case, formally known as Raffles v Wichelhaus, is a leading English contract law case that established the doctrine of mutual mistake when both parties of a contract are mistaken about an essential term of the contract.

Scienter Misrepresentation

A false representation made knowingly, without belief in its truth, or recklessly without caring whether it is true or false.