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If You Can’t Take the Heat, Get Out of the Kitchen: Calculating the Costs of a Fire at Southern Hospitality Inn

Christine Ladwig, Dana Schwieger, Raven Lawhorn
November 1, 2018
SKU:
BUS-005112
Topic: 
Accounting & Finance
Length: 
10 pages
Keywords: 
litigation support, Cost Accounting, cost projections, loss estimations, business interruption
Student Price: 
$4.00

Mike Wilson, accountant for Southern Hospitality Inn hotel, was pulling together the projected costs and lost operating revenues of the hotel and the adjoining restaurant, Bridgeton Kitchen, for insurance claim filings following a devastating fire. Because the inn and restaurant had not been in business for even a year before the fire occurred, Mike also needed to rely upon industry projections for similar facilities, rather than historical sales records, to determine lost revenues. Mike had collected all of the data that he needed to start performing the calculations; it was now just a matter of doing the projections. Once the estimations were completed, Mike had to decide what information to provide the insurance company to support the hotel’s claim.