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Should pvc have accepted boat and the gift

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Reference no: EM13487366

Ocean Adventures Limited is a large importer/wholesaler of luxury cruise boats and is currently experiencing financial difficulties. Their audit firm is PVC Partners but they have not paid the audit fees for the past three years. The audit partner recently threatened to resign from the audit if the outstanding fees were not paid. To prevent this occurring, Ocean Adventures offered to supply AUDITRUS with a nine-metre cruise boat as payment. The partner accepted this offer in full consideration of the outstanding fees, even though the boat was only worth 75% of the balance.

As a gift, Ocean Adventures also gave the partner a 15% shareholding in an unrelated company. At present these shares are worth $21,500.

Q: What if any, issues exist in this situation? Should PVC have accepted boat and the gift (consider each one separately in your answer).

 

Reference no: EM13487366

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