Aman and Juanita have

$150,000

in their business bank account. You have calculated their warehouse\ stock and equipment to be valued at a total of

$480,000

.\ They want to take out a policy for

$330,000

, making the premium cheaper than a

$480,000

policy.\ They think the risk of a total loss is unlikely and prepared to self-insure using their funds in the bank.\ Assume there was a small fire where they incurred a loss of

$20,000

to stock and equipment.\ Calculate and explain how much the insurer is obliged to pay them. (5 marks)\ Explain to Aman and Juanita how the proceeds are going to be treated for income tax and GST purposes.

Aman and Juanita have $150,000 in their business bank account. You have calculated their warehouse stock and equipment to be valued at a total of $480,000. They want to take out a policy for $330,000, making the premium cheaper than a $480,000 policy. They think the risk of a total loss is unlikely and prepared to self-insure using their funds in the bank. Assume there was a small fire where they incurred a loss of $20,000 to stock and equipment. Calculate and explain how much the insurer is obliged to pay them. (5 marks) Aman and Juanita have $150,000 in their business bank account. You have calculated their warehouse stock and equipment to be valued at a total of $480,000. They want to take out a policy for $330,000, making the premium cheaper than a $480,000 policy. They think the risk of a total loss is unlikely and prepared to self-insure using their funds in the bank. Assume there was a small fire where they incurred a loss of $20,000 to stock and equipment. Calculate and explain how much the insurer is obliged to pay them