ABC (Pty)Ltd is an SME furniture retailing business. On the 1st of January 2022, the premises were subject to a serious fire which destroyed the building, all contents and stock. Despite an effort to find alternative temporary premises, nothing suitable could be located before expiry of the maximum indemnity period (MIP). The insured are tenants in the building and only insure Contents, Stock and BI under their policy. There is a cessation of rent clause within the lease with the landlord. The policy is subject to average. BI insurance is provided as follows:

Gross Profit sum insured R200,000

Maximum Indemnity Period 12 months

Uninsured Working Expenses as stated in the policy are:

Purchases, net of stock movement

Delivery charges

Bad debts

The company continued to pay staff during the interruption period and all other costs remained the same.

Turnover for the years before the fire was as follows:

2019 R959,591

2020 R1,165,775

2021 R1,088,819

Financial details for the year ending 31 December 2021:

Sales	R1,088,819
Finance commission
Income from concession
Turnover		R1,088,819
Opening stock	R21,367
Production wages	R71,494
Purchases	R608,323
Closing stock	-R22,646
Cost of sales		R678,538
Gross profit		R410,281
Wages and salaries	R126,368
Rent	R44,068
Rates	R73,678
Delivery charges	R36,422
Utilities	R8,507
Cleaning	R372
Waste disposal	R779
Repairs and maintenance	R2,912
Communication	R2,481
Advertising	R37,198
Bad debts	R2,500
Credit card charges	R548
Depreciation	R1,015
Total overheads		R336,848
Net profit		R73,433

Question Calculate the net loss before average for 2021

a.

R244 068

b.

R169 551

c.

R71 862

d.

R413 596