AB Developers Signs a Contract with CL Corp

question 3

Multiple Choice

AB Developers signs a contract with CL Corp., agreeing to build a $20 million office for the corporation. The construction contract was substantially performed. There were, however, a few minor breaches of the contract by AB Developers that made CL Corp. incur damages worth $10,000. Which of the following is most likely to be true in this scenario? ​

• A)Since there was a breach of contract, CL Corp. may not pay any compensation to AB Developers.
• B)CL Corp. needs to pay the full price under the contract since the work was substantially performed.
• C)CL Corp. needs to pay the full price under the contract less the damages suffered by it.
• D)AB Developers needs to pay nominal damages to CL Corp. for breach of contract.

Understand accounting for acquisitions in not-for-profit entities and the recognition of goodwill.

Understand the calculation and implication of cash discounts on payments.

Recognize the treatment and recording of sales returns and allowances under the perpetual inventory system.

Interpret credit terms and their impact on payment amounts and timing.