If a clothing firm sale its waste

Mr. Atharv ,The journal entry for sale of scrap would be:

  Bank a/c.              Dr.       ---

       To scrap sale a/c.                  ----

Where, the scrap sale would be shown as other income at the credit side of P&L a/c , as miscellaneous income. It will be known as the operating income if it is the normal scrap which ordinarily occurs during the year,But if it is from the sale of scrap occurring from abnormal loss then it will be shown as "deduction from the abnormal loss " on the dr. side of the p&l account.i.e. the total abnormal loss amt. will get reduced by scrap sale amt. and the balance will be shown as abnormal loss at dr. side of p&l account.

I hope this helps you.

what are that abnormal loss ??

See the normal loss in any business is the normal wastages occurring during the daily operations of any entity. Which are unavoidable, hence they constitute the cost of goods sold  ,i.e. these normal wastages are never separately shown in the trading or p&l a/c .

While the abnormal loss is the loss or wastages which does not occur during the ordinary course of business Eg. Loss due to fire burst out in factory, material loss due to machinery breakdown, loss on sale of any fixed asset or investment of the entity etc.i.e. the loss occurred because of any non routine event ,which may or may not be uncontrollable.

These abnormal losses are always separately shown in the p&l a/c as follows:

(A) abnormal loss.                 Dr.    ---

          To trading a/c.                              ---

(B) p&l a/c.                              Dr.    ---

           To abnormal a/c.                         ---

ok A laptop shop incurred loss due to fire of Rs 2 lacs and they sell that damaged laptop worth Rs 2 lacs as scrap and the value firm get is just Rs 20 thousand so what are the adjustment does they directly adjust the scrap income in loss due to fire a/c and then transfer the balance of 1.8 lacs to the p&l a/c ??

Yes , this is the treatment.

They will first cr their trading account by 1.8 lacs as loss by fire and then dr. their p&l a/c by the same amt 1.8 lacs

and we can debit the p&l by loss by fire a/c  rs 2 lac  and credit the p&l a/c by 20 thousand as income from sale of scrap ??? 

does it is appropriate adjustment ??

I think it is better to net off the position..But I think neither any AS says to show the extraordinary event as net of any income arising because of it....So you may show separately ...