Mathieson Wanted to Lease a Suite in the New Office

question 22

Multiple Choice

Mathieson wanted to lease a suite in the new office building owned by Logan, which is the most prestigious one in town. He knew that Logan would not rent to him because of a business deal several years ago that had gone bad, costing Logan a great deal of money. Logan swore he would never do business with Mathieson again. Mathieson paid Muir to act as an agent for his company, and Logan rented to him. Several months later, Logan found out who had really rented the suite.

• A) This is a unilateral mistake, which would entitle Logan to declare the lease contract to be at an end.
• B) This is a mutual mistake, which would entitle either party to declare the contract to be at an end.
• C) This is a unilateral mistake, but Logan cannot end the contract because the identity of the other party is not a material term of the contract.
• D) Since the contract has been in existence without problems for several months, Logan cannot now withdraw his agreement to the contract as Mathieson has relied on it.
• E) A contract based on a lie is void.

Grasp the principles of depreciation and amortization for long-lived assets.

Understand the differences and similarities between IFRS and U.S. GAAP in accounting for long-lived assets.

Grasp the principles for recognizing gains and losses from exchanges and sales of assets.

Comprehend the conditions under which firms record nonmonetary assets at book value or fair value.

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