4. Hoar plc has prepared draft financial statements for the year ending 30 September 20X1, following a physical inventory count. However, the company has found inventory with a sales price of 550.000 was stolen in a burglary at the company's warehouse in August 20X1. Hoar sells goods at cost plus 25%. Hoar plc has insurance that covers 90% of the cost of inventory stolen. No accounting entries have been made for the insurance claim.

Adjusting for the insurance claim will

A. increase net profit by 45,000

B. decrease net profit by 45,000

C. increase net profit by 36,000

D. decrease net profit by 36,000