Stan orally agreed to sell his house to Humphrey and Humphrey made a down payment. Humphrey wanted it ready for his family quickly, so he had a new roof put on, new carpeting installed, and renovated the kitchen. Stan now thinks the place looks great and has decided not to sell. A business law student told him he could refuse to sell because the agreement was oral. Can he? Explain.

The following pertains to smoke, inc.’s investment in debt securities: on december 31, year 3, smoke reclassified a security acquired during the year for $70,000. it had a $50,000 fair value when it was reclassified from trading to available-for-sale. an available-for-sale security costing $75,000, written down to $30,000 in year 2 because of an other-than-temporary impairment of fair value, had a $60,000 fair value on december 31, year 3. what is the net effect of the above items on smoke’s net income for the year ended december 31, year 3?