Journal entries if the following line items are given as
adjustment in balance sheet and p l a/c
Fire accident of inventory
Case 1. No insurance coverage
Case 2.partly insurance coverage
Case 3. Fully insurance coverage
- 5 Answers
- 7415 Views
- Capital IQ, I also Faced
- E-Mail Answers
Answer Posted / bharathi
case 1 No Insurance Coverage
Inventory value(Fire accident) portion to be adjusted with Total Inventory Value it will reflect in two places one in closing Stock in Trading a/c and the same reflect in Balance Sheet too. The Total Value of Fire accident to be treated as loss.
(For eg. Total Inventory Value Rs.100 (Fire Accident Rs.25))
Following Journal to be passed in Trading A/c
Loss on Fire Accident a/c dr 25
To Inventory A/C 25
Inventory Value Become 75 now - only these amount will reflect as closing stock in trading a/c and balance sheet
In First Case there is no insurance coverage hence we have to bear the entire loss
case 2 Partly Insurance Coverage
Inventory value(Fire accident partly insured) portion to be adjusted with Total Inventory Value it will reflect in two places one in closing Stock in Trading a/c and the same reflect in Balance Sheet too. The Part Value(if percent (%) available according to that it will cover) of Fire accident to be treated as loss. Stock in Qty to be adjusted
(For eg. Total Inventory Value Rs.100 (Fire Accident Rs.25))
Insurance Coverage Rs.12.50
Loss on Fire Accident a/c dr 12.50
To Insurance(Received/receivable A/C 12.50
Inventory Value Become 75 now - only these amount will reflect as closing stock in trading a/c and balance sheet
In the second case only part of the amount covered by the insurance company. Hence we have to bear 1/2 portion loss.
case 3 Fully Insurance Coverage
Inventory value(Fire accident Fully insured) portion not to be adjusted with Total Inventory value due to the full portion of the insured inventory will be refunded by the insurance co. so there is no monetary loss but any way stock in qty to be adjusted 100 - 25 = 75
(For eg. Total Inventory Value Rs.100 (Fire Accident Rs.25))
Insurance Coverage Rs.25
Loss on Fire Accident a/c dr 25.00
To Insurance A/C 25.00
Inventory Value Become 75 now - only these amount will reflect as closing stock in trading a/c and balance sheet
In the third case we have lost nothing because full fire accident portion covered by the insurance company
| Is This Answer Correct ? | 1 Yes | 0 No |
Post New Answer View All Answers
plz send all previous question papers for SBI clerical post.My email id is mechabhilash6@gmail.com
Tell me the steps for Import and Export Thanks
EXPAND_________SEAMEC
WHICH IS MORE RISKY TO A BANKER, A CASH CREDIT OR A LETTER OF CREDIT
What is inter-corporate deposits? and where it is shown in balance sheet?
what are the suggestions to control NPA in rural areas?
I want to know that if i get call from Mumbai Circle in SBI. what does it mean where will be my posting and my job profile, will i get accomodation from bank or not.
How exchange rates are maintained in sap
what are the aspects an auditor has to see when he/she is doing the Purchase,Sales and Journal Vouching
purchase car from toyota innova 50000 cheque from one firm and 449893 from other firm.... and 1350000 loan saction from kotak mahindra.....how can entry make with interest
3.In TALLY,we used to call tally erp 9.like that,in sap we used to call SAP ECC 6.0.here what is ECC?,i know the abbreviation of ECC.i want to know the role of ECC?
Why are there 30 blue-chip companies only considered in bombay stock exchange.And why those thirty only effect the sensex
what are Blue-Chip companies?
ER-1, ER-2,ER-3,ER-4,ER-5,ER-6,ER-7 plz tell me use of these excise form
when assessing the credit proposal of a prospective borrower if he gets internal rating below the hurdle rate what will you suggest as a banker
