Question

there was a fire in m ltd Godown. It resulted in loss of rs 5 cr goods. However the insurance company accepted the claim of rs 4.5 Cr only. This will result in

Answer 1

This will result in a loss of 0.5 Cr to a company

Answer 2

When the fire broughht about the loss worth rs 5 the ltd first credited the stock and capital account by rs 5, when the insurance company comes in and accepts the claim by compensating the Godown LTD. the compensation worths 4.5, therefore the stock insured will be debited by rs 4.5 and the 0.5 loss experienced by the ltd co. will be credited, on the stock accounts.