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Janet Jones Sold the Assets and Liabilities of Her Coin-Operated

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Essay

Janet Jones sold the assets and liabilities of her coin-operated laundry to Kevin Katz for $10,000. The assets of the business included all of the washers and dryers. The liabilities included the amounts still owing on seven new dryers, which had been purchased recently from Dryer Company under an installment contract. Katz agreed to make the installment payments on the new dryers as they came due. After Katz failed to make an installment payment when it was due, Dryer Company sued Jones. Jones claimed she no longer was liable. How will the court decide?


Definitions:

Gold Coins

These are coins made primarily or exclusively of gold, often used historically as currency and currently as investment or collectible items.

Reserve Ratio

The fraction of deposits that banks are required to hold in reserve and not lend out, set by central banking authorities.

Gold Coins

A type of currency made from gold, used historically as a medium of exchange and a store of value.

Small Denomination Time Deposits

Savings accounts or certificates of deposit in banks that have smaller balances and are subject to a specified time frame before withdrawal.

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