Jorge and his wife own a beachfront vacation home in Savannah, Georgia. During the year, high winds from a tropical storm shatter a sliding glass door and rain from the storm causes extensive water damage to the kitchen. Fortunately, during a calm in the storm, Jorge is able to board up the door, which limits the water damage to the kitchen. The items damaged in the storm are:
|
|
Cost
|
Value Before
|
Value After
|
Insurance Proceeds
|
|
Kitchen furniture
|
$2,100
|
$1,400
|
$400
|
$650
|
|
TV
|
250
|
200
|
-0-
|
125
|
|
Refrigerator
|
1,000
|
950
|
100
|
800
|
|
Linoleum flooring
|
1,600
|
900
|
-0-
|
500
|
In addition, Jorge pays $625 to replace the sliding glass door. The insurance company will not reimburse him for the cost of the new door because the old sliding glass door did not meet the company's standards for a hurricane area. What is the amount of Jorge's casualty loss before considering any annual limitations that may apply?