Accounting treatment

This query is : Resolved

Prashant (Querist)
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28 May 2009 We sold 90 qty to party but during the transit 74 qty were damaged and thus party returned the same and accepted balance 16 qty. We also made invoice for 16 qty only. Later on we filed the claim with insurance company for damaged 74 qty and the claim was passed for 90% and we received the cheque also.
In such case how the accounting entries are passed for each transaction.

Thanks in advance

CA.BHARAT BHUSHAN

CA.BHARAT BHUSHAN (Expert)
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28 May 2009 Debtors .............Dr (90 Qty)
To Sales (90 Qty)

Sales Return.........Dr (74 Qty)
To Debtors (74 Qty)

Damaged Goods............Dr (74Qty)
To Purchases

Insurance Claim.........Dr(90% of 74Qty)
To Damaged Goods

Profit & Loss A/c........Dr (10% of 74 Qty)
To Damaged Goods