Mikayla Enters into a Contract with Logan to Provide Surface

question 64

Multiple Choice

Mikayla enters into a contract with Logan to provide surface material for Mikayla's tennis courts by April 1 for a tournament to begin May 1.The contract specifies an amount to be paid if the contract is breached.This is a liquidated damages clause if the amount is

• A)an excessive estimate of the loss on a breach.
• B)a reasonable estimate of the loss on a breach.
• C)designed to penalize the breaching party.
• D)intended to quickly provide cash to the nonbreaching party.

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Definitions:

Current Liabilities

Obligations that a company is expected to pay within one year or within its normal operating cycle, whichever is longer, including accounts payable, short-term loans, and taxes payable.

Noncurrent Liabilities

Obligations of a company not due for settlement within the next 12 months, such as long-term loans, bond payables, and lease liabilities.

Probable Future Payment

An expected financial obligation or expense, often projected based on current contracts, agreements, or identified liabilities.

Form W-2

Form W-2 is a tax form used in the United States to report wages paid to employees and the taxes withheld from them.