What is the difference between corporate chains, voluntary chains, and retailer cooperatives? How are such retail organizations different from franchise organizations?
What will be an ideal response?
Corporate chains are two or more outlets that are commonly owned and controlled. They have many advantages over independents. Their size allows them to buy in large quantities at lower prices and gain promotional economies. They can hire specialists to deal with areas such as pricing, promotion, merchandising, inventory control, and sales forecasting. A voluntary chain is a wholesaler-sponsored group of independent retailers that engages in group buying and common merchandising. The other type of contractual association is the retailer cooperative — a group of independent retailers that bands together to set up a jointly owned, central wholesale operation and conduct joint merchandising and promotion efforts. The main difference between franchise organizations and other contractual systems is that franchise systems are normally based on some unique product or service; a method of doing business; or the trade name, goodwill, or patent that the franchisor has developed.
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During 2017, Grambling Company purchased 10,000 shares of Southern Corp. common stock for $215,000 as an investment (no significant influence). The fair value of these securities was $289,000 at December 31, 2017. During 2018, Grambling sold all of the Southern stock for $226,000. Grambling Company should report a realized gain on the sale of stock in 2018 of:
(a) $11,000 (b) $25,000 (c) $26,000 (d) $37,000
The subjective intent approach differs from the objective intent approach in that the subjective intent approach _______
A. tries to interpret the conduct of the parties involved B. tries to interpret the intent of the parties involved C. is considered an inferior form of interpretation D. is only used when objective intent cannot be interpreted