Answer:
$16,875
Explanation:
Calculation for What amount should Underwater report as the net loss from the flood
Net loss from the flood=[( $250,000+$20,000)-(($300,000-($300,000* 35%))-$7,500]-($75,000-$7,500*75%)
Net loss from the flood=[$270,000-($300,000-$105,000)-$7,500]-($75,000-$7,500*75%)
Net loss from the flood=[($270,000- $195,000)-$7,500]-($75,000-$7,500*75%)
Net loss from the flood=($75,000-$7,500)-($75,000-$7,500*75%)
Net loss from the flood=$67,500-$50,625
Net loss from the flood= $16,875
Therefore the amount that Underwater should report as the net loss from the flood is $16,875
