H Company is in the process of filing an insurance claim in connection with a fire...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
H Company is in the process of filing an insurance claim in connection with a fire on September 15, 2027 that destroyed its inventory and accounting records. As the external auditor of the company, you were requested the company to determine the amount of loss and in filing the said insurance claim. You obtained the following information based on your investigation: Inventory as reported in the latest annual financial statements, dated December 31, 2026 amounted to P632,369.40 this amount is based on the physical inventory count conducted by the H Company under you observation on December 31,2026. Accounts payable and accounts receivable as reported in the latest annual financial statements amounted to P330,319.23 and P405,027.54. Unpaid open invoices due to the suppliers as of the date of the fire were ascertained to be P380,836.11. All sales are on account and unpaid open invoices due from customer as of the date of the fire were ascertained to be P321,435.75. Payments to vendors from December 31,2026 to the date of the fire totaled to P1,925,614.68 while total collections on receivables during the same inclusive dates totaled to P2,628,586.50. Almost all the merchandise items are sold at approximately 30% in excess of cost. As at September 15, 2027, the total cost of inventory items not destroyed by the fire amounted to P434,646.99. The annual premium of P23,640 on the insurance carried was due and paid on January 1, 2026. The policy, which has a face amount of P465,000 carries an 80% coinsurance clause (applied to the estimated book value of inventories on the date of the fire.) What is the estimated amount to be recovered from the insurance company? H Company is in the process of filing an insurance claim in connection with a fire on September 15, 2027 that destroyed its inventory and accounting records. As the external auditor of the company, you were requested the company to determine the amount of loss and in filing the said insurance claim. You obtained the following information based on your investigation: Inventory as reported in the latest annual financial statements, dated December 31, 2026 amounted to P632,369.40 this amount is based on the physical inventory count conducted by the H Company under you observation on December 31,2026. Accounts payable and accounts receivable as reported in the latest annual financial statements amounted to P330,319.23 and P405,027.54. Unpaid open invoices due to the suppliers as of the date of the fire were ascertained to be P380,836.11. All sales are on account and unpaid open invoices due from customer as of the date of the fire were ascertained to be P321,435.75. Payments to vendors from December 31,2026 to the date of the fire totaled to P1,925,614.68 while total collections on receivables during the same inclusive dates totaled to P2,628,586.50. Almost all the merchandise items are sold at approximately 30% in excess of cost. As at September 15, 2027, the total cost of inventory items not destroyed by the fire amounted to P434,646.99. The annual premium of P23,640 on the insurance carried was due and paid on January 1, 2026. The policy, which has a face amount of P465,000 carries an 80% coinsurance clause (applied to the estimated book value of inventories on the date of the fire.) What is the estimated amount to be recovered from the insurance company?
Expert Answer:
Related Book For
Posted Date:
Students also viewed these accounting questions
-
Your client, Miguel Trading Corporation, requests your assistance in determining the amount of loss and in filing an insurance claim in connection with a fire on June 15, 2022 that destroyed some of...
-
Following is a portion of management's report on internal control by Milacron Inc. in 2004. Item 9A. Controls and Procedures Disclosure Controls and Procedures (Interim Analysis) Disclosure controls...
-
The Crazy Eddie fraud may appear smaller and gentler than the massive billion-dollar frauds exposed in recent times, such as Bernie Madoffs Ponzi scheme, frauds in the subprime mortgage market, the...
-
A money market portfolio has a market value of $20,000,000 and its value will change by $500 for a change in short-term yields of one basis point. The eurodollar futures contract has a tick size of...
-
A New Musical Instrument. You have designed a new musical instrument of very simple construction. Your design consists of a metal tube with length L and diameter L/10. You have stretched a string of...
-
A brine solution is used as a cooling medium in a steel heat exchanger. The brine is circulated within the heat exchanger and contains some dissolved oxygen. Suggest three methods, other than...
-
Pleading rules are principally contained in the California Code of Civil Procedure. However, in addition to the CCP, local rules generally control mechanics. Find some special local rules that are...
-
From the paper Effects of Chronic Nitrate Exposure on Gonad Growth in Green Sea Urchin Strongylocentrotus droebachiensis (Aquaculture, Vol. 242, No. 14, pp. 357363) by S. Siikavuopio et al., we found...
-
How do leaders leverage emotional intelligence competencies to navigate volatile market conditions, inspire team resilience, and cultivate a cohesive organizational identity amidst periods of...
-
Reconstruct the following syllogistic forms and use the five rules for syllogisms to determine if they are valid from the Boolean standpoint, conditionally valid from the Aristotelian standpoint, or...
-
financial calculator keystrokes please! 1. A fully amortizing constant payment mortgage loan is made for \( \$ 350,000 \) at \( 8 \% \) for 20 years. a. Create an amortization table showing the...
-
What is a code of ethics and why is it important for an international business to have one?
-
What concepts can managers use to resolve ethical dilemmas between the home and host countries?
-
What type of justice is the focus of the ethics theory of justice?
-
What is the rights theory of ethics and what kinds of rights does it cover?
-
Explain the functional-use test. Explain the taxpayer-use test.
-
Tiger acquired 20% share capital of Deer on 1 August 2021 at the cost of 5.5million. Tiger has classified Deer as an associate undertaking. For the year ended 31 October 2021, Deer has reported a net...
-
You are maintaining a subsidiary ledger account for Police-Training Expenditures for 2013. The following columns are used: Inventory purchases are initially recorded as expenditures. Record the...
-
Identify the three essential characteristics that define a liability, one of the key elements of financial statements.
-
Obtain the 2013 financial statements for Thomson Reuters Corporation either through the companys website or through SEDAR (www.sedar.com). Required: a. In addition to the general requirements for the...
-
Laurel Ltd. has a December 31 fiscal year-end. During 2017, the company purchased 15,000 shares of Pinegreen Company for $4.40 per share ($66,000 total), and sold these shares in 2020 for $5.60 per...
-
The shareholders equity for Best in Show Cinemas L.td. (BSC) (adapted) at December 31. 2019 , appears as follows: On April 15, 2020, the market price of BSC common shares was \(\$ 17\) per share....
-
Identify the effects--both the direction and the dollar amount-of the following assumed transactions on the total shareholders' equity of a large corporation. Each transaction is independent. a....
-
Solartech Inc. had the following sharcholders' equity at January 31 (dollars in millions): Assume that on March 7, Solartech split its common shares 2 for 1. Prepare the shareholders' equity section...
Study smarter with the SolutionInn App