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A electronic shop mistakenly ruined/damaged

Ks (Ac) (138 Points)

14 February 2022

a electronic shop mistakenly ruined/damaged the customer's TV worth RS 200,000 so what are the accounting treatment for it and journal entries

question 1 - the shop have compensate the customer with new TV of same price i.e. Rs 200,000

question 2 - the shop also keep the damaged TV so they can use its part

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4 Replies

prasad Nilugal ( GST Practitioner & Accounts ) (14546 Points)
Replied 14 February 2022

For Damage TV pass entry

Damage TV set A/c Dr
To Purchase A/c Cr
( TV set damage reduce from purchase)
Also reduce 1 TV set from stock journal.

for new TV set pass entry

Trade Debtor's A/c Dr
To Sales A/c Cr
To CGST A/c Cr
To SGST A/c Cr
( Booking of sales entry )

F

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Ks (Ac) (138 Points)
Replied 14 February 2022

no ! the firm provide th TV for free of cost means the firm bears this cost as expense so what are journal entries and does the damaged TV recorded as assets to the firm

prasad Nilugal ( GST Practitioner & Accounts ) (14546 Points)
Replied 14 February 2022

If purchase and sale and purchase of TV set , then it should be Stock item in the books , not Asset I think .

Ks (Ac) (138 Points)
Replied 15 February 2022

ok but what are the entry if the firm provide the tv to the customer for free to compensate the customer for his damaged tv ( which is damaged due to firm's fault )