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RSB [31]
3 years ago
6

A commercial building with a market value of $200,000 has an insurance policy with an 80 percent coinsurance clause. The owner c

arried $120,000 of insurance and sustained a covered loss of $60,000. What amount of the loss would be covered by the insurance company
Business
1 answer:
RideAnS [48]3 years ago
8 0

Answer:

$45,000

Explanation:

In this case the market value is $200,000 but the policy limit is only $120,000, with a coinsurance of 80%.

Since the amount of loss = $60,000, the insurance company will pay:

(stop limit / value) x loss = ($120,000 / $160,000*) x $60,000 = 0.75 x $60,000 = $45,000

*the $160,000 value is determined by multiplying the fair market value of the property times the coinsurance = $200,000 x 80% = $160,000

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Jeremy operates a business as a sole proprietorship. The proprietorship uses the cash method of accounting. He decides to incorp
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Answer:

$13,000

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Given that:

Jeremy operates a business as a sole proprietorship which uses a cash method of accounting. Now he is planning transfer them into a new corporation in  exchange for its stock.

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The liabilities payable will be deducted and taken care of by the corporation.

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