A fire occured in the godown of M/s. Krishna Traders on 31st March 2015. The stock as

Fantastic news! We've Found the answer you've been seeking!

Question:

A fire occured in the godown of M/s. Krishna Traders on 31st March 2015. The stock as on 31st December 2014 was valued at Rs. 5,88,000. From the following particulars relating to the period from 1st January 2015 to 31st March 2015, you are required to ascertain the amount of claim to be lodged with the insurance company in respect of the value of goods destroyed by fire:

(1) The purchases during the above period amounted to Rs. 2,13,000 of which goods costing Rs. 30,000 were received on 8th May, 2015.

(2) Goods costing Rs. 15,000 were found defective and were sold for Rs. 9,000. The goods in question had been included in the closing stock as at 31st December 2014, at cost.

(3) The closing stock as at 31st December 2014 was undervalued by Rs. 12,000.

(4) The sales during the above period amounted to Rs. 2,79,000 of which "sales on approval" basis amounted to Rs. 30,000. No intimation was received from the customers in respect of 60% of the goods sold on approval basis.

(5) On 20th February 2015, goods costing Rs. 68,000 were sent to consignee and the same were lying unsold with them.

(6) The accounting year of the firm ends on 31st December every year and the sales and gross profits of the preceding 5 years are as under:

The gross profit during the period of fire should be taken on the basis of the weighted average of last five years profits, giving more weightage to the results of the later years.

(7) The value of the goods salvaged was estimated at ~ 1,20,000.

(8) The insurance policy taken out by the company was for ~ 3,00,000. The policy was subject to average clause.