X files a lawsuit for breach of contract against Y. X claims that Y profited fro

Question

X files a lawsuit for breach of contract against Y. X claims that Y profited from the breach of contract, and that all of Y’s profits in the calendar year ended 2016 were the result of Y’s breach of contract. Thus, X seeks as consequential damages all profits that Y reported on Y’s income statement for the calendar year ended 2016. X was not at fault. Y’s income statement reports the following: Sales $500,000 ($150,000 of which is accounts receivable per the balance sheet), $200,000 in total expenses ($50,000 of which is depreciation). How much in consequential damages is X entitled to? a. $100,000 b. None of the other choices are correct. c. $130,000 d. $200,000 e. $0

Explanation / Answer

Solution:- d. $200,000

Explanation:-

(500,000 - 150,000) - (200,000 - 50,000) = $200,000

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