A building valued at $300,000 in insured for $150,000 and there is an 80% co-insurance clause on the policy. The building sustained loss to one area and caused$60,000 worth of damage. The insured would receive a settlement of:$50,000$60,000$45,500$37,500

In case of 80% Co insurance, there is required insurance limit which is equal to 80% of replacement…

Answered: A building valued at $300,000 in…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Find the amount to be paid by the insurance company. Assume the policy includes an 80% coinsurance clause. Round to the nearest dollar. Replacement Cost of Building: $340,000 Face Value of Policy: $306,000 Amount of Loss: $2,500
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1. Clavel County leases an office building with a remaining economic life of 20 years. The fair market value of the building is $6 million. Annual lease payments are agreed at $523,107, based on a 6 percent interest rate. The lease meets the conditions for a capital lease.Record the lease and the first year’s interest payment (a) In a governmental fund (b) In the government-wide statements 2. Should the office building be depreciated? If so, how and where should depreciation be recorded? 3. Suppose the lease did not meet the conditions for a capital lease. How and where should the lease be recorded? Should the office building be depreciated? If so, how and where should depreciation be reported?

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A building valued at $300,000 in insured for $150,000 and there is an 80% co- insurance clause on the policy. The building sustained loss to one area and caused $60,000 worth of damage. The insured would receive a settlement of: $50,000 O $60,000 $45,500 $37,500