ch19 - Chapter 19 OWNERSHIP AND RISK Practice Test 1. CPA...

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Chapter 19 OWNERSHIP AND RISK Practice Test 1. CPA QUESTION On Monday, Wolfe paid Aston Co., a furniture retailer, $500 for a table. On Thursday, Aston notified Wolfe that the table was ready to be picked up. On Saturday, while Aston was still in possession of the table, it was destroyed in a fire. Who bears the loss of the table? (a) Wolfe, because Wolfe had title to the table at the time of loss (b) Aston, unless Wolfe is a merchant (c) Wolfe, unless Aston breached the contract (d) Aston, because Wolfe had not yet taken possession of the table (d). CPA Examination, November 1989, #49. 3. Franklin Miller operated Miller Seed Co. in Pea Ridge, Arkansas. He bought, processed, and sold fescue seed, which is used for growing pasture and fodder grass. Farmers brought seed to Miller who would normally clean, bag, and store it. In some cases the farmers authorized Miller to sell the seed, in some cases not. Miller mixed together the seed that was for sale with the seed in storage so that a customer could not see any difference between them. Miller defaulted on a $380,000 loan from the First State Bank of Purdy. First State attempted to seize all of the seed in the store. Tony Havelka, a farmer, protested that his 490,000 pounds of seed was merely in storage and not subject to First State’s claim. Who is entitled to the seed? First State gets it. UCC §2-326(3) creates a presumption in favor of creditors. When goods are delivered to be sold, the goods are subject to the creditors' claims unless the owner (Havelka) takes
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ch19 - Chapter 19 OWNERSHIP AND RISK Practice Test 1. CPA...

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