Gainey Resources purchased $100,000 worth of 8%, $1,000 par value, 10-year term bonds from Camarena Company on July 18, 2017, for $103,200. Beginning in 2019, Camarena has been unable to pay their bond interest payments, and the market price of the bonds has continued to drop. In 2020, the market price of the bonds was $65,700. After testing, Gainey decided that they would likely never recover more than 80% of their initial investment. According to Gainey, these bonds have suffered impairment. should be amortized more rapidly than normal. have suffered unrecoverable loss. should be written off completely.

Which of the following statements is correct? large corporations are taxed more favorably than sole proprietorships. corporate stockholders are exposed to unlimited liability. due to limited liability, unlimited lives, and ease of ownership transfer, the vast majority of u.s. businesses (in terms of number of businesses) are organized as corporations. most businesses (by number and total dollar sales) are organized as partnerships or proprietorships because it is easier to set up and operate in one of these forms rather than as a corporation. however, if the business gets very large, it becomes advantageous to convert to a corporation, mainly because corporations have important tax advantages over proprietorships and partnerships. most business (measured by dollar sales) is conducted by corporations in spite of large corporations’ often less favorable tax treatment, due to legal considerations related to ownership transfers and limited liability.

James albemarle created a trust fund at the beginning of 2016. the income from this fund will go to his son edward. when edward reaches the age of 25, the principal of the fund will be conveyed to united charities of cleveland. mr. albemarle specified that 75 percent of trustee fees are to be paid from principal. terry jones, cpa, is the trustee. james albemarle transferred cash of $500,000, stocks worth $400,000, and rental property valued at $250,000 to the trustee of this fund. immediately invested cash of $360,000 in bonds issued by the u.s. government. commissions of $7,900 are paid on this transaction. incurred permanent repairs of $9,000 so that the property can be rented. payment is made immediately. received dividends of $8,000. of this amount, $3,000 had been declared prior to the creation of the trust fund. paid insurance expense of $4,000 on the rental property. received rental income of $10,000. paid $8,000 from the trust for trustee services rendered. conveyed cash of $7,000 to edward albemarle.

The discussion of the standards for selection of peanuts that will be used in m& ms and the placement of the m& m logo on the candies speaks to which building block of a sustainable competitive advantage: