Goods damaged in Godown!!!

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Rajesh (Querist)
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18 June 2010 Dear Experts,
1. Please provide me the journal entry for loss incurred on Goods damaged while in Godown in
a) Financial books
b) Inventory books

With regards,
Rajesh

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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18 June 2010 In the Financial books

Dr: Loss on damage
Cr: Stock A/c

incase Goods Insured
One more

Dr:Insurance claim receivable
Cr: Loss on damgae

Inventory books

Dr: Scrap of damaged goods
Cr: Normal Stock

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Rajesh

Rajesh (Querist)
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20 June 2010 Sir again my doubt is w.r.t. accounting Goods damaged in Godown.

While we are passing the entry
Loss on goods damaged A/c Dr.
To Stock A/c

While finalisation of the accounts we will be passing
P/L A/c Dr.
To Loss on goods damaged A/c
(Being the loss on goods damaged transfered to P& L Account.)
My Query is
1) How we will be able to close this Stock account?
Thank you for spending your valuable time on clarifying my doubts.

With regards,
Rajesh.

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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20 June 2010 Even Goods damaged stock account remains same but it separate as damages stock like scrap, untill you are selling for some low rate or written off the completely from the books

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