Question

is of Stock by Theft or Fire or Damage:
Goods worth Rs. 1,00,000 were destroyed by fire, Insurance company admitted and
60% amount.​

Answer 1

Answer:>The first entry is,

GOODS DESTROYED BY FIRE A/c Dr. 100,000/-

To. TRADING A/c Cr. 100,000/-

> The second entry is,

PROFIT & LOSS A/c Dr. 40,000/-

To. GOODS DESTROYED BY FIRE A/c Cr. 40,000/-

(100,000 * 60%) or (100,000 * 60/100)

>The 3rd entry is,

ASSETS Dr. 60,000/- (in balancesheet)

To. GOODS DESTROYED BY FIRE A/c Cr. 60,000/-

Explanation: