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Solution 2.13
Step 1: Calculate the value of inventory at the date of accident
Statement of inventory as at 31 December 2023
st
Details TZS TZS
Opening inventory (W1) 4,000,000
FOR ONLINE READING ONLY
Add: Purchases 8,500,000
Less: Purchases of plants (capital expenditure) 500,000
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Cost of goods available for sale 12,000,000
Less: Cost of sales: 11,800,000
LANGUAGE EDITING
Sales 2,950,000 8,850,000
Less: Gross profit (W2)
Closing inventory 3,150,000
Step 2: Calculate the value of inventory loss (amount of inventory destroyed by fire)
Details TZS
Amount of inventory on the date of accident 3,150,000
Less: Amount of salvage inventory 300,000
Amount of inventory loss 2,850,000
countancy for Advanced Secondary Schools
Step 3: Calculate the amount of insurance claim since the average clause is in use, then:
Sum insured
Insurance claim = # Actual loss
Inventory value at the date of accident
, 2 500 000
,
= # , 2 850 000 = TZS , 2 261 905
,
,
,
, 3 150 000
Insurance claim = TZS 2,261,905
Alternatively
Step 1 and step 2 can be combined to form a statement of insurance claim, and then workout the
amount of insurance claim as follows:
Student’s Book Form Five
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