From the information given below calculate the sum insurable Date of fire 01 03 2016 Turnover from 0...........

General Accounting Principles Others

From the information given below, calculate the sum insurable:

Date of fire - 01.03.2016

Turnover from 01.03.2015 to 29.02.2016 - Rs.88,00,000

Agreed GP ratio - 20%

Special circumstances clause provided for the increase of turnover by 10%

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EPFO AO EO 2017

Rs.19,36,000

Rs.48,40,000

Rs.10,32,000

Rs.24,20,000

Let’s break down the calculation:

- Turnover for the year prior to fire: Rs.88,00,000

- Increase for special circumstances (10%): 88,00,000 × 10% = Rs.8,80,000

- Adjusted turnover: 88,00,000 + 8,80,000 = Rs.96,80,000

- Agreed Gross Profit Ratio: 20%

- Sum Insurable: Adjusted turnover × GP ratio = 96,80,000 × 20% = Rs.19,36,000

Options:

1. Rs.19,36,000

2. Rs.48,40,000

3. Rs.10,32,000

4. Rs.24,20,000

Correct Answer:

Option 1: Rs.19,36,000

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