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Mountain State Ford generally received invoices on a monthly
basis from the manufacturers for the parts that those manufactur-
ers had shipped, or had intended to ship, to it. With respect to
those parts, each such invoice showed the part number of each
type of part, the quantity of units of each such type, and the
purchase price of each such unit. (We shall sometimes refer to
the price of each unit of each type of part as shown on the
invoice that the manufacturer sent to Mountain State Ford as the
invoice price.)
Upon receipt of a manufacturer's invoice, an employee of
Mountain State Ford entered the total of the invoice prices
(aggregate invoice price) of all the parts, but not the invoice
price of each unit of each type of part, into an account which
Mountain State Ford maintained for the parts that it purchased
(purchases account). Mountain State Ford did not utilize the
purchases account in maintaining its inventory. Another employee
of Mountain State Ford in charge of payables verified with the
parts department that Mountain State Ford had received the number
of units of each type of part that was listed on each invoice,
and, if so, Mountain State Ford paid the aggregate invoice price.
Once Mountain State Ford paid the aggregate invoice price, it
filed the invoice by manufacturer and invoice date.
Where (1) there was a shortage in the quantity of units of
one or more types of parts that the manufacturer intended to ship
to Mountain State Ford, as shown on the shipping tape and the
packing sheets, (2) the manufacturer mistakenly sent Mountain
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Last modified: May 25, 2011