2017 · Q61
From the information given below, calculate the sum insurable Date of fire-01.03.2016 Turnover from 01.03.2015 to 29.02.2016—F 88,00,000 Agreed GP ratio-20% Special circumstances clause provided for the, increase of turnover by 10%
General Accounting Principles, Auditing and InsuranceInsurance
- ARs. 19,36,000
- BRs. 48,40,000
- CRs. 10,32,000
- DRs. 24,20,000
Explanation
Sum insurable = annual turnover adjusted by the special circumstances clause, multiplied by the agreed gross profit ratio: Rs. 88,00,000 x 1.10 (10% increase) x 20% = Rs. 96,80,000 x 0.20 = Rs. 19,36,000. The date of fire and turnover period define the base year. Hence A.