Accounting of loss by fire

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This query is : Resolved

vivek (Querist)

06 June 2014 if goods loss by fire as on 25th march 2014 which cost of Rs.10000 and company claim the loss for the same to the insurance company but till the closing of the account i.e. 31st march 2014 company does not know how much insurance claim have to be received from the insurance company.
so please tell me entry as on 31st march 2014.

Ganeshbabu K

Ganeshbabu K (Expert)

06 June 2014 Dr.Goods lost by fireA/c
Cr.Insurance claim receivableA/c

being goods cost 10000 lost
.
.
and you have to reverse the VAT input availed on this goods which is lost on fire as there is no output going to be generated using this input

vivek

vivek (Querist)

07 June 2014 thanks Mr Ganeshbabu.
but tell me when insurance claim will receive Rs 8000 in next financial year i.e 2014-15 than we have to book loss Rs 2000 in fy2014-15 rather than 2013-14,if answer is yes, then treatement of loss has to book in the year when claim amount is to be received rather than in the fy when the loss incurred by fire

Rupesh Jain

Rupesh Jain (Expert)

07 June 2014 you can calim loss of rs. 2000/- in 2014-15. due to you are not know on dt 31.3.2014

31.3.2014

insurance calim receivable a/c 10000
to purchases a/c

after calim

loss by fire a/c 2000
insurance company a./c 8000
to insurance calim receivable 10000

bank a/c 8000
to insurance company. 8000

Ganeshbabu K

Ganeshbabu K (Expert)

07 June 2014 Agree with above reply,

And also you should reverse the VATinput availed if any on those lost goods

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