On May 1, First Bank perfected a security interest in Debtor’s inventory. On June 1, Bob...
On May 1, First Bank perfected a security interest in Debtor’s inventory. On June 1, Bob bought an item of the secured inventory from Debtor for cash in the ordinary course of business. On July 1, Second Bank acquired a perfected security interest in Debtor’s same inventory. In this case:
| a. |
Bob took the item of inventory subject to First Bank’s security interest. |
|
| b. |
First Bank has a security interest in the proceeds received from the sale of inventory to Bob. |
|
| c. |
First Bank’s security interest has priority over Second Bank’s security interest. |
|
| d. |
b and c |
Homework Answers
Answer is option C
First Bank’s security interest has priority over Second Bank’s security interest.
In case of multiple perfected secured interest, the first party perfected has priority over the second party being perfected.
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Skate 'n'
Surf
Statement of profit or loss
for the period 1 June to 30 June 20XX
Revenue
Sales revenue
Sales revenue
26,820
Less: Sales returns and allowances
320
Net sales
revenue
26,500
Less: Cost of sales
14,980
Gross
profit
11,520
Other revenue:
Discount received
2,300
13,820
Expenses
Advertising expense
1,170
Depreciation expense
450
Discount allowed
280
Insurance expense
320
Interest expense
160
Postage and stationery expense
150
Superannuation exepnse
95
Wages expense
1,000
Total
expenses
3,625
Net
profit/(loss)...
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Skate 'n'
Surf
Statement of profit or loss
for the period 1 June to 30 June 20XX
Revenue
Sales revenue
Sales revenue
26,820
Less: Sales returns and allowances
320
Net sales
revenue
26,500
Less: Cost of sales
14,980
Gross
profit
11,520
Other revenue:
Discount received
2,300
13,820
Expenses
Advertising expense
1,170
Depreciation expense
450
Discount allowed
280
Insurance expense
320
Interest expense
160
Postage and stationery expense
150
Superannuation exepnse
95
Wages expense
1,000
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expenses
3,625
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profit/(loss)...
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