While auditing Babel Financials, Inc., Vincenzo noted the below claims which could qualify as exceptions: a....
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
While auditing Babel Financials, Inc., Vincenzo noted the below claims which could qualify as exceptions: a. The sum insured under Tae Ho's personal accident policy is P300,000 for loss of a limb. He loses an arm in an accident and claims under the policy. b. The limit of liability under Spacesweepers Ltd.'s public liability is P60,000,000. A customer makes a successful liability claim against them and damages of P90,000,000 are awarded. c. Inzaghi's motor policy is subject to a P3,000 damage excess. She makes a claim for damage to her car caused while she was parked by an unknown third party at P47,000. d. Wusang Office Supplies insured their warehouse contents against theft for P1,500,000. They made a claim for P150,000 following a burglary and the loss adjuster reports that the total actual value of the warehouse contents is P3,000,000 2/3 of which are totally gone/destroyed. The policy is subject to an average clause. Vincenzo noted that where a claim is valid, there are some circumstances where it will be only partially met by the insurer, but all of these claims are fully indemnified by Babel per examination of case reserves. Babel did not enter into a reinsurance contract for these four policies. According to Luca, his manager, a full indemnity will not be provided to the insured where: a. The sum insured is less than the value of claim the insurer's liability is restricted to the sum insured; b. The average clause operates - where the policyholder has under-insured their property; c. An excess applies the insured is responsible for the first amount of a claim; or d. A franchise exists - the insurer pays out once a limit has been reached. However, Luca emphasized that the insurer can make an 'ex-gratia' payment even though there is no valid cover - to enhance the image and reputation of the insurer or to avoid undue hardship for the insured. Determine the following: 21. How much shall be payable to Tae Ho? 22. How much shall be payable to Spacesweepers, Ltd.? 23. How much shall be payable to Wusang Office Supplies? 24. How much is the understatement (overstatement) in Babel's books for Inzaghi's motor policy if Vincenzo further noted that there is an unrecorded ex-gratia payment of P1,000 to Inzaghi? 25. All of the above information including #4 considered, give the entry to correct the balances of Claims Payable and Case Reserves/Direct Losses. While auditing Babel Financials, Inc., Vincenzo noted the below claims which could qualify as exceptions: a. The sum insured under Tae Ho's personal accident policy is P300,000 for loss of a limb. He loses an arm in an accident and claims under the policy. b. The limit of liability under Spacesweepers Ltd.'s public liability is P60,000,000. A customer makes a successful liability claim against them and damages of P90,000,000 are awarded. c. Inzaghi's motor policy is subject to a P3,000 damage excess. She makes a claim for damage to her car caused while she was parked by an unknown third party at P47,000. d. Wusang Office Supplies insured their warehouse contents against theft for P1,500,000. They made a claim for P150,000 following a burglary and the loss adjuster reports that the total actual value of the warehouse contents is P3,000,000 2/3 of which are totally gone/destroyed. The policy is subject to an average clause. Vincenzo noted that where a claim is valid, there are some circumstances where it will be only partially met by the insurer, but all of these claims are fully indemnified by Babel per examination of case reserves. Babel did not enter into a reinsurance contract for these four policies. According to Luca, his manager, a full indemnity will not be provided to the insured where: a. The sum insured is less than the value of claim the insurer's liability is restricted to the sum insured; b. The average clause operates - where the policyholder has under-insured their property; c. An excess applies the insured is responsible for the first amount of a claim; or d. A franchise exists - the insurer pays out once a limit has been reached. However, Luca emphasized that the insurer can make an 'ex-gratia' payment even though there is no valid cover - to enhance the image and reputation of the insurer or to avoid undue hardship for the insured. Determine the following: 21. How much shall be payable to Tae Ho? 22. How much shall be payable to Spacesweepers, Ltd.? 23. How much shall be payable to Wusang Office Supplies? 24. How much is the understatement (overstatement) in Babel's books for Inzaghi's motor policy if Vincenzo further noted that there is an unrecorded ex-gratia payment of P1,000 to Inzaghi? 25. All of the above information including #4 considered, give the entry to correct the balances of Claims Payable and Case Reserves/Direct Losses.
Expert Answer:
Answer rating: 100% (QA)
ANSWER 21 Tae Hos personal accident policy has a sum insured of P300000 for loss of a limb Since he lost an arm in the accident he is entitled to the ... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
Students also viewed these accounting questions
-
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...
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
The following additional information is available for the Dr. Ivan and Irene Incisor family from Chapters 1-5. Ivan's grandfather died and left a portfolio of municipal bonds. In 2012, they pay Ivan...
-
What kinds of functions of local government are usually protected by immunity?
-
One subunit of Freeway Sports Company had the following financial results last month: Requirements 1. Complete the performance evaluation report for this subunit (round to two decimal places). 2....
-
During mammalian reproductive cloning, _________ is fused with __________. a. a somatic cell, a stem cell b. a somatic cell, an egg cell c. a somatic cell, an enucleated egg cell d. an enucleated...
-
Air at \(25^{\circ} \mathrm{C}\) flows normal to the axis of an infinitely long cylinder of \(1.0-\mathrm{m}\) radius. The approach velocity is \(100 \mathrm{~km} / \mathrm{hr}\). Find the rotational...
-
The Chamber of Commerce in a Canadian city has conducted an evaluation of 300 restaurants in its metropolitan area. Each restaurant received a rating on a 3-point scale on typical meal price (1 least...
-
Examine the thermodynamic aspects of renewable energy technologies, including solar thermal systems, wind turbines, and fuel cells, in terms of energy conversion efficiency, exergy analysis, and the...
-
Spencer Duck (SSN 000-22-1111) is single and his eight-year-old son, Mitch, lives with him nine months of the year in a rented condominium at 321 Hickory Drive in Ames, Iowa. Mitch lives with his...
-
Question 3.2 Homework. Unanswered. Due Sep 23rd, 11:59 PM Company A Acquired 90% of Company B's stock for $900,000 when the fair market value of B's net assets were $600,000. Under IFRS, how much...
-
How are primary foliations recognized in deformed and metamorphosed sedimentary rocks?
-
How can those conditions change during an orogenic event?
-
Like Death Valley, the Dead Sea is a place where you can walk on dry land below sea level, and an apparently unmotivated hole in the ground along a strike-slip fault. How do you think it formed?
-
What is meant by a mylonite nappe?
-
Identify the factors in the general environment that affect firm and industry profitability.
-
Garca and Martinez manufacture widgets and currently have $3 million in taxable income. The company is considering an expansion, and theyve asked you to evaluate the project. The expansion requires...
-
What is the order p of a B + -tree? Describe the structure of both internal and leaf nodes of a B + -tree.
-
Clifford Johnson has a limited partnership investment and a rental condominium. Clifford actively manages the rental condominium. During 2012, his share of the loss from the limited partnership was...
-
Larry Gaines, age 42, sells his personal residence on November 12, 2012, for $144,000. He lived in the house for 7 years. The expenses of the sale are $10,500, and he has made capital improvements of...
-
Diego, age 28, married Dolores, age 27, in 2012. Their salaries for the year amounted to $46,479 and they had interest income of $3,500. Diego and Dolores' deductions for adjusted gross income...
-
Consider two hypersonic wind tunnels with the same reservoir temperature of \(3000 \mathrm{~K}\) in air. (a) One tunnel has a test-section Mach number of 10. Calculate the flow velocity in the test...
-
The reservoir temperature calculated in problem 5.20 is beyond the capabilities of heaters in the reservoir of continuous-flow wind tunnels using air. This is why you do not see a Mach 20...
-
As problems 5.18 and 5.19 reflect, the air temperature in the test section of conventional hypersonic wind tunnels is low. In reality, air liquefies at a temperature of about \(50 \mathrm{~K}\)...
Study smarter with the SolutionInn App