Question

explain the steps involved in calculating the claims of stock​

Answer 1

Procedure:

The insured, in the event of fire accident, informs the insurer (Insurance Company) of the loss of property and stocks. The insurance contract is usually for a year and the insurer indem­nifies the insured for the loss suffered.

In response to the request of the insured, a technical expert is entrusted by the Insurance Company; and the technical expert, after investigation, sends his report by stating the amount payable by the Insurance Company to the insured. His report, after a careful investigation, must reveal the causes due to which the fire broke out and whether the claim is covered by the policy or not.

Claim for Loss of Stock:

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The values of assets other than stock can be ascertained at any time. The stocks with which he deals are not maintained daily. Moreover, stock-taking every day is not possible and is a very difficult job. In such a situation, one has to estimate the loss of value of stock on account of fire by preparing a statement or a Memorandum Trading Account.

The items that are needed or available are:

Step 1: First, try to know the value of opening stock of the year, in which the fire broke out.

Step 2: To the above (Step 1), add the net purchases made up to the date of fire.

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Step 3: From the result of Step 2, deduct the cost of goods sold.

Step 4: From the result of Step 3, deduct the salvaged stock; and the figure finally available is the loss of stock due to fire.

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#Hope it helps u..