Elvis is the owner of Singalong, Inc., a corporation that operates a karaoke studio in New York City. Singalong has fallen on hard economic times, but Elvis hopes, with more advertising and hard work, to keep the company functioning profitably. The essential equipment he needs to operate his business has recently broken down. His equipment supplier is Music Box Corporation. Elvis purchases the equipment he needs from Music Box for $160,000. On March 18, Elvis pays for the equipment in full on delivery. Singalong does not owe any additional money to Music Box. On April 1 of the same year, Elvis, no longer able to keep Singalong afloat, files a bankruptcy petition in federal court. At the time of the filing, Singalong has no assets; the company is worth nothing. Singalong has three unsecured creditors and owes all three $120,000. All three unsecured creditors have equal priority. Singalong has no other creditors.

(a) How much, if anything, will the three unsecured creditors of Singalong be entitled to recover from the $160,000 that Singalong paid to Music Box? Simply provide the amount in dollars. Do not explain.

(b) Assume the following changes to the facts provided above in this question: Singalong does not pay for the equipment in cash. Rather, it purchases the equipment from Music Box on credit. The purchase of the equipment is a PMSI. The equipment is delivered to Singalong on March 18. Music Box properly perfects the PMSI by filing on April 5 of the same year. How much, if anything, are the unsecured creditors entitled to recover from the sale of the equipment? Simply provide the amount in dollars. Do not explain.

2. Abe is the founder and sole owner of Union Resources, Inc. (UR), a Texas oil drilling company. Abe hires Grant to digitize UR's payroll. The job will take about one week. Even before Grant is to begin work on the project Abe plans to fly to San Francisco on a one-month business trip. Abe asks Grant how much Grant will charge for the services he will provide to UR. Grant replies, "Until I get into the project, I'm not sure how much work I will have to perform to digitize your payroll." Abe responds, "In that case, I'll write you a signed, blank UR check. You can fill in the sum payable when you complete the work." Abe provides Grant with a signed, blank UR check, drawn on UR's account at Gettysburg National Bank (GB). The next day he flies on United Airlines from Houston, Texas to San Francisco, California. Grant finishes the job on one week. The fair charge for the job is $40,000. Grant completes the check in the sum of $500,000. He indorses the check and sells it to Ulysses for $490,000. Ulysses does not know and has no way of knowing that Grant completed the check with a fraudulent amount. GB dishonors the check on instructions from Abe.

(a) What is the maximum amount, if anything, that Abe owes to Ulysses on the UR check? Simply provide the amount, if any, in dollars. Do not explain.

(b) Suppose that Grant gave the UR check to Ulysses free of charge. What is the maximum amount, if anything, that Abe owes to Ulysses? Simply provide the amount, if any, in dollars. Do not explain.