Shifty borrowed $10,000 from easy. when easy tried to collect the debt, she discovered that shifty had moved to another state. easy tracked shifty down and demanded payment. knowing it would cost easy a substantial amount of time and money to collect the debt, shifty offered to pay $5,000 on the condition that easy cancel the remainder of the debt. easy agreed to accept the $5,000 and cancel the remaining $5,000 of the debt. which of the following statements is correct? a. shifty has $5,000 of income when easy cancels the debt. b. easy has $5,000 of income upon collection of half of the debt. c. shifty had $10,000 of income upon obtaining the loand. neither shifty nor easy has any income from his transaction.

Costco wholesale corporation operates membership warehouses selling food, appliances, consumer electronics, apparel and other household goods at 471 locations across the u. s. as well as in canada, mexico and puerto rico. as of its fiscal year-end 2005, costco had approximately 21.2 million members. selected fiscal-year information from the company's balance sheets follows. ($ millions). selected balance sheet data 2005 2004 merchandise inventories $4,015 $3,644 deferred membership income (liability) 501 454 (a) during fiscal 2005, costco collected $1,120 cash for membership fees. use the financial statement effectstemplate to record the cash collected for membership fees. (b) in 2005, costco recorded $46,347 million in merchandise costs (that is, cost of goods sold). record thistransaction in the financial statement effects template. (c) determine the value of merchandise that costco purchased during fiscal-year 2005. use the financial statementeffects template to record these merchandise purchases. assume all of costco's purchases are on credit.