A Bailment Was Created Between Owen and Padma

question 3

Multiple Choice

A bailment was created between Owen and Padma.The bailment involved the storage of a widget for 12 months.The price for storage was $1000 per month.At the end of the year, only $5000 had been paid in total.The widget was worth $10 000.It was sold for that amount under a lien and right of sale.Ignoring the costs associated with the enforcement of the lien and the right of sale, when the sale proceeds are distributed, the bailee will be entitled to receive

• A)$5000.
• B)$3000.
• C)$7000.
• D)$10 000.
• E)$12 000.

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Definitions:

Net Profit Margin

A financial ratio that shows the percentage of profit a company generates from its revenues.

Operating Income

Earnings before interest and taxes, representing the profit generated from a company's core business operations.

Net Income

The profit a company generates after all expenses, taxes, and costs have been subtracted from total revenue, indicating financial health.

Income Tax Expense

The accounting term for income taxes due to federal, state, and local governments within a given fiscal period.