goods destroyed

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ritu mehta (Querist)
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03 September 2010 hii i have some query about the treatment of goods destroyed due to fire
goods destroyed 40lac
sale of good destroyed at lot rate 80000rs
insurance claim rec. 16lac
then tell me the treament of this case that how we show these trans in trading&p\l ¬es to a\cs
pls reply fastly

Manmohan ACA, CS

Manmohan ACA, CS (Expert)
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03 September 2010 it seems ur case if hypothetical one, as when insurance company pays claim it take over all the salvage

however pass following entries

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Goods destroyed by fire A/c Dr. 39,20,000
cash A/c Dr. 80,000

To purchases A/c (Trading) 40,00,000

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Insurance claim receivable A/c (if already received cash A/c ) Dr. 16,00,000
P/L A/c Dr. 23,20,000
To Goods destroyed by fire A/c 39,20,000