Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Accounting Basics Expert

Q1) You are the associate in law firm of Moose and Squirrel LLC. One of the firm's clients, ABC Transport, currently sent firm an audit letter. Letter asks firm to give information to ABC's auditor concerning a possible claim involving contract between ABC and Baddenoff Corporation ("Baddenoff."). Captain Peachfuzz, firm's billing partner for ABC, negotiated Baddenoff contract nine months ago. Captain Peachfuzz has asked you to suggest  him on audit response.

Contract needs ABC to transport valuable art to New York City for auction. ABC's most recent shipment was hit by train and art was totally destroyed. ABC didn't insure shipment as needed by contract. ABC has not yet reported accident to Baddenoff, so Baddenoff is not aware of possible breach.

Exact value of art is uncertain. Captain Peachfuzz thinks loss to Baddenoff could be from $1.1 million to $3.4 million, or even more. Though, contract gives for liquidated damages of $850,000 per shipment in event of  uninsured loss. If Baddenoff brings a claim, law of State of Vida will apply. Vida courts almost always enforce liquidated damages clauses, especially when injured party's actual damages exceed specified liquidated damages.

Captain Peachfuzz believes there is possible interpretation of contract that would only need insurance against theft, not accident. If this interpretation is accepted, ABC would not be in breach and would not be liable. When you asked Captain Peachfuzz about claim, he said, "Other side has good case. Our argument is a plausible interpretation of contract, but we are not probable to win on that argument." Captain Peachfuzz is pretty sure ABC will sue when it discover out about accident.

Describe what information Captain Peachfuzz may give to auditor about Baddenoff possible claim against ABC . (Suppose that amount involved is material to ABC.)

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M918848

Have any Question? 


Related Questions in Accounting Basics

Kiona co set up a petty cash fund for payments of small

Kiona Co. set up a petty cash fund for payments of small amounts. The following transactions involving the petty cash fund occurred in May (the last month of the company's fiscal year). May 1 Prepared a company check for ...

Question 1ryan withdrew cash from the business to pay his

Question 1 Ryan withdrew cash from the business to pay his personal cell phone bill. The expanded accounting equation changes include __________. A. increase in both cash and withdrawal B. decrease in both cash and withd ...

Assignment- fraud in the accounting information systemfor

Assignment- Fraud in the Accounting Information System For this assignment, research the Internet or Strayer databases to locate a firm that was involved in a fraud and / or embezzlement case. Explain how the firm's acco ...

To understand the accounting equation and its

To understand the accounting equation and its elements QUESTION Mr. "A" starts a new business. Before to start the business operation, he has purchased vehicle Rs. 1,500,000, office premises Rs. 3,000,000, stock of goods ...

This assignment will assess the following learning

This assignment will assess the following learning outcomes: - Demonstrate the impact on the financial statements and the implication for different users of accounts of alternative ways of treating controversial accounti ...

Write a paper about internal controlsassignmentcontent

Write a paper about internal controls Assignment Content Page - Introduction - Definition of internal controls(Books) - Components of internal control system(Books) - Examples of internal controls(Books or research paper ...

Construct a time series plot what type of pattern exists in

Construct a time series plot. What type of pattern exists in the data? Quarter Year 1 Year 2 Year 3 1 923 1112 1243 2 1056 1156 1301 3 1124 1124 1254 4 992 1078 1198 Use a multiple regression model with dummy variables a ...

Question 1the company you work for has a large amount of

Question 1 The company you work for has a large amount of disposable cash and very little debt on its books. The board of directors has expressed an interest in taking this money and investing in equity and debt securiti ...

Case study requirementsbullselect an accounting topic of

Case Study Requirements • Select an accounting topic of your choice - this could be revenue recognition, inventory valuation, fair value, stock options, derivatives, investments, segment reporting, leases, just to name a ...

Accounting for governmenttrue or false1 a fund in itself is

ACCOUNTING FOR GOVERNMENT True or False 1. A fund in itself is a separate legal entity that is established to comply with laws that require that certain transactions be segregated and accounted for as a separate "fund." ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro