Isaac Contracts to Sell Boyd All of His Requirements of Coal.In

question 25

Essay

Isaac contracts to sell Boyd all of his requirements of coal.In the past,Boyd has required between 1000 and 1500 tons of coal per year,but the contract contains no estimate of Boyd's needs.In 1998,Boyd's needs increase dramatically,and it demands 10,000 tons of coal from Isaac.Is Isaac obligated to sell Boyd this amount?

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Definitions:

Cost Method

An accounting approach for investments, where the investment is recorded at cost and adjusted only for dividends received, impairments, and certain other limited circumstances.

Consolidated Statement

A financial report that combines the assets, liabilities, equity, income, expenses, and cash flows of a parent company and its subsidiaries.

Land Holding

Real estate or land owned by an individual or entity, including the natural resources and rights that come with the property.

Unrealized Profit

Profits that have been earned but not yet realized through a transaction, often related to investments that have increased in value but have not been sold.