R consigned 2,000 kg of chemicals to J. Of the above , 500 kg were destroyed by fire during transit. J cleared the balance of 1,500 kg of chemicals and sold 1,000 kg at average price of Rs.1,000 per kg.J incurred the following expenses : Godown rent Rs. 5,000, Insurance Rs. 3,000, clearing charges Rs. 4,500.Insurance claim received against fire Rs. 4,00,000 after admitting the salvage value Rs. 10,000. J was entitled to commission of 10% on sales proceeds. How much amount will be sent by J to R after adjusting his commission and expenses out of the sales proceeds ?

The correct option is B Rs. 8,87,500
Sale price of one kg of chemical $=$ $1,000$

Total sale proceeds of 1,000 kg of chemical $=$ $1,000\times 1,000$

$=$ $10,00,000$

Expenses incurred by J $=$ Godown rent $+$ Insurance $+$ Clearing charges

$=$ $5,000+3,000+4,500$

$=$ $12,500$

Commission of J $=$ $\frac{10}{100}\times 10,00,000$

$=$ $1,00,000$

Amount sent by J to R $=$ Total sale proceeds $-$ Expenses $-$ commission

$=$ $10,00,000-12,500+1,00,000$

$=$ $8,87,500$.