Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Use the following information of Ligo Fleet Company to answer the question below: Number of vehicles 3 0 0 Depreciation 1 0 % on a

Use the following information of Ligo Fleet Company to answer the question below:
Number of vehicles 300
Depreciation 10% on a straight line basis
Deductible (excess) per claim R20000
Claims information
1. Ligo Fleet Company submitted three vehicle claims amounting to R800000 on 5 January 2022. The three vehicles were stolen in the three provinces of the country.
2. Ligo Fleet submitted five vehicle claims amounting to R1200000 on 3 March 2023. The five vehicles were stolen in the five provinces of the country.
Policy changes
The parties agreed to change the current deductible method to a disappearing deductible method in the 2 January 2023 renewal negotiations.
Management should apply the recapture value of 25% of the depreciation rate.
Question
Calculate the new deductible amount after the payment of the claims submitted on the 3 March 2023.
a.
R72000
b.
R80000
c.
R86000
d.
R100000

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

IFRS 3rd edition

1118978080, 978-1119153726, 1119153727, 978-1119153702, 978-1118978085

Students also viewed these Finance questions