To calculate the amount of claim for loss of stock with Insurance Company B Ltd, we need to follow these steps:

1. Calculate the cost of goods sold (COGS) for the year 2021 and the first half of 2022.
2. Calculate the value of the stock at the time of the fire.
3. Subtract the salvaged value of the stock from the value of the stock at the time of the fire.
4. Compare the result with the fire insurance policy value and claim the lesser amount.

Let's go through these steps in detail:

1. COGS for 2021 = Opening stock + Purchases - Closing stock = 1,35,000 + 9,15,000 - 1,50,000 = 9,00,000
COGS for the first half of 2022 = Opening stock + Purchases - Closing stock (unknown) = 1,50,000 + 8,00,000 - Closing stock.
But we know that the purchase prices raised by 20% in 2022, so the COGS for the first half of 2022 = 1,50,000 + (8,00,000/1.2) - Closing stock = 1,50,000 + 6,66,667 - Closing stock.

2. The value of the stock at the time of the fire is the closing stock which we don't know yet. But we know that the selling prices hiked by 10% in 2022, so the sales for the first half of 2022 = COGS + Profit = 9,90,000.
Therefore, the profit = 9,90,000 - COGS = 9,90,000 - (1,50,000 + 6,66,667 - Closing stock) = 2,73,333 + Closing stock.
Since the profit is increased by 10%, the profit in 2021 = 2,73,333/1.1 = 2,48,485.
Therefore, the COGS in 2021 = Sales - Profit = 12,00,000 - 2,48,485 = 9,51,515 which is different from the COGS we calculated earlier. This discrepancy might be due to rounding or other factors not considered in this calculation.

3. The loss from the fire = Value of stock at the time of the fire - Salvaged value = Closing stock - 20,000.

4. The claim from the insurance company = min(Loss from the fire, Fire insurance policy value) = min(Closing stock - 20,000, 1,48,750).

Without the exact closing stock value, we can't calculate the exact claim amount. But we can say that the claim amount will be the lesser of the loss from the fire and the fire insurance policy value.

Question

To calculate the amount of claim for loss of stock with Insurance Company B Ltd, we need to follow these steps:

1. Calculate the cost of goods sold (COGS) for the year 2021 and the first half of 2022.
2. Calculate the value of the stock at the time of the fire.
3. Subtract the salvaged value of the stock from the value of the stock at the time of the fire.
4. Compare the result with the fire insurance policy value and claim the lesser amount.

Let's go through these steps in detail:

1. COGS for 2021 = Opening stock + Purchases - Closing stock = 1,35,000 + 9,15,000 - 1,50,000 = 9,00,000
   COGS for the first half of 2022 = Opening stock + Purchases - Closing stock (unknown) = 1,50,000 + 8,00,000 - Closing stock. 
   But we know that the purchase prices raised by 20% in 2022, so the COGS for the first half of 2022 = 1,50,000 + (8,00,000/1.2) - Closing stock = 1,50,000 + 6,66,667 - Closing stock.

2. The value of the stock at the time of the fire is the closing stock which we don't know yet. But we know that the selling prices hiked by 10% in 2022, so the sales for the first half of 2022 = COGS + Profit = 9,90,000. 
   Therefore, the profit = 9,90,000 - COGS = 9,90,000 - (1,50,000 + 6,66,667 - Closing stock) = 2,73,333 + Closing stock.
   Since the profit is increased by 10%, the profit in 2021 = 2,73,333/1.1 = 2,48,485.
   Therefore, the COGS in 2021 = Sales - Profit = 12,00,000 - 2,48,485 = 9,51,515 which is different from the COGS we calculated earlier. This discrepancy might be due to rounding or other factors not considered in this calculation.

3. The loss from the fire = Value of stock at the time of the fire - Salvaged value = Closing stock - 20,000.

4. The claim from the insurance company = min(Loss from the fire, Fire insurance policy value) = min(Closing stock - 20,000, 1,48,750).

Without the exact closing stock value, we can't calculate the exact claim amount. But we can say that the claim amount will be the lesser of the loss from the fire and the fire insurance policy value.

Knowee AI · Accepted Answer

To calculate the amount of claim for loss of stock with Insurance Company B Ltd, we need to follow these steps:

1. Calculate the cost of goods sold (COGS) for the year 2021 and the first half of 2022.
2. Calculate the value of the stock at the time of the fire.
3. Subtract the salvaged value of the stock from the value of the stock at the time of the fire.
4. Compare the result with the fire insurance policy value and claim the lesser amount.

Let's go through these steps in detail:

1. COGS for 2021 = Opening stock + Purchases - Closing stock = 1,35,000 + 9,15,000 - 1,50,000 = 9,00,000
   COGS for the first half of 2022 = Opening stock + Purchases - Closing stock (unknown) = 1,50,000 + 8,00,000 - Closing stock. 
   But we know that the purchase prices raised by 20% in 2022, so the COGS for the first half of 2022 = 1,50,000 + (8,00,000/1.2) - Closing stock = 1,50,000 + 6,66,667 - Closing stock.

2. The value of the stock at the time of the fire is the closing stock which we don't know yet. But we know that the selling prices hiked by 10% in 2022, so the sales for the first half of 2022 = COGS + Profit = 9,90,000. 
   Therefore, the profit = 9,90,000 - COGS = 9,90,000 - (1,50,000 + 6,66,667 - Closing stock) = 2,73,333 + Closing stock.
   Since the profit is increased by 10%, the profit in 2021 = 2,73,333/1.1 = 2,48,485.
   Therefore, the COGS in 2021 = Sales - Profit = 12,00,000 - 2,48,485 = 9,51,515 which is different from the COGS we calculated earlier. This discrepancy might be due to rounding or other factors not considered in this calculation.

3. The loss from the fire = Value of stock at the time of the fire - Salvaged value = Closing stock - 20,000.

4. The claim from the insurance company = min(Loss from the fire, Fire insurance policy value) = min(Closing stock - 20,000, 1,48,750).

Without the exact closing stock value, we can't calculate the exact claim amount. But we can say that the claim amount will be the lesser of the loss from the fire and the fire insurance policy value.

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