Joe Owed Sam $5000

question 131

Essay

Joe owed Sam $5000. After the money was due, he approached Sam and told him that he couldn't pay the money, but if Sam was willing to take $3000 that day in full satisfaction of the debt, he could come up with that money. Sam agreed to take the money and, in fact, took the money. Once he had it in his possession, he then turned around and sued Joe for the other $2000. Explain the likely outcome.

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Definitions:

Ending Figure

The ending figure represents the final amount or value of an account or calculation at the conclusion of a specified period.

Statement of Owner's Equity

A financial statement that shows changes in the equity of a company's owner(s) over a period, including investments, withdrawals, and the company's net income or loss.

Accumulated Depreciation

Full amount of depreciation expenses that have been attributed to a fixed asset since it was deployed.

Financial Statements

Reports that summarize the financial performance and health of a business including balance sheet, income statement, and cash flow statement.