Gerry Has a PAP with Liability Coverage Limits of 25/50/10

question 18

Multiple Choice

Gerry has a PAP with Liability coverage limits of 25/50/10 and a $1,000 Medical Payments coverage limit.He collides with another car (he is at fault) and the following losses are incurred:
Body injury to the driver of the other car = $100,000.
Bodily injury to the passenger of the other car = $3,000.
Property damage to the other car = $11,000.
Bodily injury to Gerry's wife = $5,000.
How much will the PAP pay,in total,for this accident?

• A)$119,000
• B)$60,000
• C)$43,000
• D)$39,000

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Definitions:

Trial Balance

A trial balance is a bookkeeping worksheet in which the balances of all ledgers are compiled into debit and credit account column totals that are equal.

Debits

Accounting entries that can increase asset or expense accounts or decrease revenue, liability, or equity accounts.

Credits

In accounting, credits refer to a bookkeeping entry that increases a credit account or decreases a debit account on a company's balance sheet.

Stockholders' Equity

The residual interest in the assets of a corporation after deducting liabilities, representing the ownership of the company’s shareholders.