Illustration 3

On 17th June 2013 , a fire occurred in the premises of Mr. Bookworm , a bookseller.
Most of the stock was destroyed , the cost of the salvaged stock being Rs.11,200/-. In
addition , some stock was salvaged in damaged condition and its value was estimated at
Rs.10,400/- . The following particulars were available from the books of accounts:

(1) Stock at the close of accounts on 31st December 2012 was Rs.83,500/-
(2) Purchases from 01-01-2013 to 17-06-2013 amounted to Rs.1,12,000/- and sales during
that period amounted to Rs.1,54,000/-
(3) On the basis of the past three years it appears that on average the gross profit of 25%
is earned on sales.

Stock was insured for Rs.75,000/- . Compute the amount of claim

Step 1 Computing the value of stock

Memorandum Trading A/c

(From 01-01-2013 to 17-06-2013)
Dr Cr
Particulars Amount Particulars Amount

To Opening Stock 83,500.00 By Sales 154,000.00

To Purchases 112,000.00
To Gross Profit (1,54,000 x
25/100) 38,500.00 By Closing Stock (Bal Fig) 80,000.00

Total 234,000.00 Total 234,000.00

Step 2 Compute Loss

Stock on date of fire 80,000.00 <<<From Step 1
Less: Salvage (11200+10400) -21,600.00
Loss 58,400.00

Step 3 Computing claim

Claim = Policy / Stock x Loss
Claim = 75000 / 80000 x 58400
Claim = Rs.54,750/-
Illustration 5
Step 1 Computing the value of stock

A fire occurred in the premises of Agni on 25th August 2013

when a large part of the stock was destroyed. Salvage was
Rs.15,000/- . Agni gives you the following information for the Memorandu
period January 1 2013 to August 25th 2013 (From 01-01-20
Particulars
(a) Purchases - Rs.85,000/- To Opening Stock

(b) Sales - Rs.90,000/- To Purchases

(c) Goods costing Rs.5,000/- were taken by Agni for personal use To Gross Profit (90000 x 33.34/100)
(d) Cost price of stock on January 1 2013 was Rs.40,000/- Total

Over the past few years , Agni has been selling goods at a
consistent gross profit margin of 33 1/3rd %. The Insurance
policy was for Rs.50,000/-. It included an average clause. Step 2 Compute Loss
Agni asks you to prepare a statement of claim to be made on
the insurance company. Value of stock
Less: Salvage
Loss

Step 3 Computing Claim

Claim = Policy/ Stock x Loss
Claim = 50,000/ 60,000 x 45,000
Claim = Rs.37,500/-
 Memorandum Trading A/c
(From 01-01-2013 to 25-08-2013)
Amount Particulars Amount
40,000.00 By Sales 90,000.00
By Goods taken for personal use
85,000.00 (Drawings) 5,000.00
30,000.00 By Closing Stock (Bal Fig) 60,000.00
155,000.00 Total 155,000.00

60,000.00 <<< From Step 1

-15,000.00
45,000.00
Illustration 6

Bonfire Enterprises closes their accounts on 30th June every year. On

30th September 2013 a major fire destroyed most of their stock.
Following information could be gathered from their books:

Particulars Amount
Stock on 30th June 2013 360,000.00
Purchases - 1s tJuly 2013 to 30th September 2013 600,000.00
Wages - 1s tJuly 2013 to 30th September 2013 230,000.00
Sales - 1s tJuly 2013 to 30th September 2013 1,000,000.00
Carriage inward for the above period 10,000.00
Carriage outward for the above period 15,000.00

Average percentage of GP is 33 1/3% . Stock of the value of Rs.75,000/-

could be salvaged. Policy was for Rs.2,50,000/-. Claim was subject to
average clause.
Following further information is available:
(1) Stock in the beginning was calculated at 10% less than cost
(2) Purchases include purchase of furniture Rs.25,000/-

(3) Amount spent for bringing and setting up the furniture in the office
was Rs.5000/- which was included in carriage inward
You are required to calculate the amount of claim.
Step 1 Computing the value of stock

Memorandum Trading A/c

(From 01-07-2013 to 30-09-2013)
Particulars Amount Particulars Amount
To Opening Stock 3,60,000 By Sales 1,000,000.00
Add: Undervalued 40,000 400,000.00
To Purchses 6,00,000 By Closing Stock (bal fig) 460,000.00
Less: Furniture purchases (25,000) 575,000.00
To Wages 230,000.00
To Carriahe inward 10,000
Less: Paid for setting up furniture (5,000) 5,000.00

To Gross Profit (1/4 on sales) (10,00,000*1/4) 250,000.00

Total 1,460,000.00 Total 1,460,000.00

Step 2 : Compute Loss

Value of closing stock 460,000.00 << Step NO1

Less: Salvage -75,000.00
Loss 385000.00

Step 3 Compute Claim

Claim = Policy /Stock x Loss

Claim = 2,50,000 / 4,60,000 x 3,85,000
Claim = 2,09,239
 Gp Ratio
Cost 1/3

Sales 1/4

360000 90
?? 10
40000

Stock 360,000.00 90
?? 100
400000
Illustration 7

On 13th March 2013, a fire ocurred and partly damaged the stock of
goods of Mona Tarders , stock having a cost of Rs.2,000/- being salvaged.
The stocks were insured against fire to the extent of Rs.15,000/-
The following particulars could be obtained from the books and records saved
Particulars Amount
Balance as per balance sheet as on 31/12/2012
Stock at cost 10,000.00
Debtors for goods 2,500.00
Creditors for goods 1,500.00
Transactions between 01-01-2013 to 13-03-2013
Cash received from debtors 20,000.00
Cash discount allowed to debtors 500.00
Goods returned by debtors 200.00
Cash paid to creditors 37,000.00
Cah discount from creditors 400.00
Goods returned to creditors 100.00
Cash sales 21,200.00
Goods given to famine relief fund (at cost) 500.00
Debtors for goods as on 13-03-2013 5,800.00
Creditors for goods as on 13-03-2013 3,000.00

All sales are made at a profit of 25% on the cost price. Draw up a
statement of claim for loss of stock Expenses of fire fighting operation
amounted to Rs.2000/-
Step 1 Computing the value of stock
Memorandum Trading A/c
(From 01-01-2013 to 25-08-2013)
Particulars Amount Particulars Amount

Total Total
Illustration 10

On 20th October , 2013 the godown and business premises of Aman

Ltd. were affected by fire. From the salvaged accounting records, the
following information is available.

Stock of goods @ 10% lower than cost as on

31st March 2013 216,000.00
Purchases less returns (1-4-13 to 20-10-13) 280,000.00
Sales less returns (1-4-13 to 20-10-13) 620,000.00

Additional information

1.Sales upto 20th October 2013 includes Rs.80,000/- for which goods
had not been dispatched.

2. Purchases upto 20th October 2013 did not include Rs.40,000/-for

which purchase invoices had not been received from suppliers though
goods have been received in godown.
3. Past records show the gross profit rate of 25%
4. The value of goods salvaged from fire Rs.31,000/-
5. Aman Ltd. has insuerd their stock for Rs.1,00,000/-
Compute the amount of claim to be lodged to the insurance company.
Step 1 Computing the value of stock

Memorandum Trading A/c

(From 01-04-2013 to 20-10-2013)

Particulars Amount Particulars Amount

To Opening Stock 240,000.00 By Sales (6,20,000-80,000) 540,000.00
To Purchases (2,80,000+40,000) 320,000.00 By Closing Stock (bal fig) 155,000.00
To Gross Profit (5,40,000 x 25/100) 135,000.00
Total 695,000.00 Total 695,000.00
Step 2 : Compute loss

Value of stock 155,000.00

Less: Salvage -31,000.00

Loss 124,000.00

Step 3: Compute Claim

Claim = Policy / Stock x Loss

Claim = 1,00,000/1,55,000 x 1,24,000
Claim = Rs.80,000
WN-1

Underval Current
Cost ued Valuation
100 10 90
?? 216000
x = 216000*100/90
Illustration 11

On 30th March 2013 fire occurred in the premises of M/s. Suraj

brothers. The concern had taken at insurance policy of Rs.60,000/-
which was subject to the average clause. From the books of acocunts
the following particulars are available relating to the period 01st
January to 30th March 2013.

1. Stock as per balance sheet at 31st

December 2012 95,600.00
2. Purchases (including purchases of
machinery costing Rs.30,000/-) 170,000.00
3. Wages (including wages Rs.3,000/- for
installation of machinery) 50,000.00

4. Sales (including goods sold on approval

basis amounting to Rs.49,500/-). No approval
has been received in respect of 2/3rd of the
goods sold on approval) 275,000.00
5. The average rate of gross profit is 20% of sales.
6. The value of the salvaged goods was
Rs.12,300/-

You are requierd to compute the amount of the claim to be lodged to

the insurance company.
Step 1 Computing the value of stock

Memorandum Trading A/c

(From 01-01-2013 to 30-03-2013)

Particulars Amount Particulars Amount

To Opening Stock 95,600.00 By Sales (2,75,000-33,000) 242,000.00

By Goods sold on approval
To Purchases (1,70,000-30,000) 140,000.00 (WN-2) 26,400.00

To Wages (50,000-3,000) 47,000.00 By Closing Stock (bal fig) 62,600.00

To Gross Profit (2,42,000 x 20/100) 48,400.00

Total 331,000.00 Total 331,000.00

Step 2 : Compute Loss

Closing Stock 62,600.00

Less: Salvage -12,300.00
Loss 50,300.00

Step 3 Compute Claim

Claim = Policy / Stock x Loss

Claim = 60,000 /62,600x 50,300
Claim = Rs.48,210.86
WN-1

Sales 275,000.00

Less: Goods sold on

approval whose approval
has not been received) 33,000.00
242,000.00

WN-2

Selling price of goods

sold on approval 33,000.00
Less: Profit (20%) -6600
Cost Price 26,400.00
Illustration 13

The premises of Emarbee Limited were engulfed by fire on 16th November, 2013
whereby substantial stock was severely destroyed. The records available with the
company yield the following information.

(a) For the year ended 31st March 2013

Particulars Amount Particulars amount

To Stock 150,000.00 By Sales 3,000,000.00
To Purchases 1,230,000.00 By Stocks 180,000.00
To Freight and direct expenses 300,000.00
To Wages 600,000.00
To Gross Profit 900,000.00
3,180,000.00 3,180,000.00

(b) For the half year ended 30th September 2013

Sales 1,800,000.00
Purchases 840,000.00
(c ) For the period from 1st October to date of fire sales and purchases were at
same, monthly rate as for period 01st April 2013 to 30th September 2013
(d) The freight, wages and direct expenses during period 01st April 2013 to date
of fire were at the same rate per month as in last year.
(e ) Salvage value is 10% of cost of stocks.
(f) The sum insured is Rs.2,00,000/-and policy contains average clause . Compute
the amount of claim.
Step 1 Computing the value of stock

Memorandum Trading A/c

(From 01-04-2013 to 16-11-2013)
Particulars Amount Particulars Amount
To Opening Stock 180,000.00 By Sales (WN-1) 2,250,000.00
To Purchases (WN-2) 1,050,000.00
To Freight and Direct Expenses (WN-3) 187,500.00 By Closing Stock (bal fig) 217,500.00
To Wages (WN-4) 375,000.00
To Gross Profit (22,50,000 x 30/100) 675,000.00

Total 2,467,500.00 Total 2,467,500.00

Step 2 : Compute Loss

Value of clsoing stock 217,500.00

Less: Salvage (10%) 21,750.00

Loss 195,750.00

Step 3 : Compute Claim

Claim = Policy / Stock x Loss

Claim = 2,00,000/ 2,17,500x 1,95,750
180,000.00
Working Notes

1. Sales Per month

For April - September 1,800,000.00 1800000/6 300,000.00
For October 300,000.00
For upto 16th November 150,000.00
2,250,000.00

2. Purchases Per month

For April - September 840,000.00 840000/6 140,000.00
For October 140,000.00
For upto 16th November 70,000.00

1,050,000.00

3. Freight and Direct Expenses Per month

Last year 300,000.00 300000/12 25,000.00

For 7 1/2 187500

4. Wages
Per month
Last year 600,000.00 600000/12 50,000.00
For 7 1/2 375,000.00

5. Finding out GP rate

GP Rate = Gross Profit / Sales *100

GP Rate = 9,00,000/ 30,00,000*100
30
Illustration 16

A fire ocurred in the premises of Miss Deepa on 14-10-

2013. From the following particulars ascertain the loss of
stock and prepare a statement of claim to be lodged with
the insurance company.

Particulars Amount
Stock as on 01-01-2012 61,200.00
Purchases from 01-01-2012 to 31-12-2012 244,000.00
Sales from 01-01-2012 to 31-12-2012 360,000.00
Stock as on 31-12-2012 54,000.00
Purchases from 01-01-2013 to 14-10-2013 294,000.00
Sales from 01-01-2013 to 14-10-2013 300,000.00

The stocks were always valued at 90% of cost price.

Salvage was Rs.36,000/- . The amount of policy was
Rs.1,26,000/-

The claim was subject to average clause

01-01-2012 to 31-12-2012
01-01-2013 to 14-10-2013

Trading A/c
(From 01-01-2012 to 31-12-2012)
Particulars Amount Particulars
To Opening Stock (61,200 x 100/90) 68,000.00 By Sales
To Purchases 244,000.00 By Closing Stock (54,000 x 100/90)
To Gross Profit (bal fig) 108,000.00

Total 420,000.00 Total

GP Rate = Gross Profit / Sales x 100

GP Rate = 1,08,000 / 3,60,000 x 100

GP Rate = 30% on sales

Memorandum Trading A/c

(From 01-01-2013 to 14-10-2013)
Particulars Amount Particulars
To Opening Stock 60,000.00 By Sales
To Purchases 294,000.00
To Gross Profit (30% of 3,00,000) 90,000.00 By Closing Stock (bal fig)

Total 444,000.00 Total

Compute Loss
Closing stock as on date of fire 144,000.00
Less : Salvage -36,000.00
108,000.00

Compute claim

Claim = Policy / Stock x Loss

Claim = 1,26,000 /1,44,000 x 1,08,000
94,500.00
Amount 90 61200
360,000.00 100 ??
60,000.00 = 61200 x 100/90

420,000.00

Amount
300,000.00

144,000.00

444,000.00
Illustration 19

A fire on October , 14, 2013 destroyed the stock of Nandu &

Associates. The business records were saved and from them the
following particulars wre ascertained

Stock at Cost on April 2012 88,600.00

Stock at Cost on April 1, 2013 75,100.00
Purchases for the yar upto 31/03/2013 207,700.00
Sales for the yar upto 31/03/2013 305,000.00
Purchases from 01st April 2013 to 14th October 2013 74,700.00
Sales from 01st April 2013 to 14th October 2013 118,000.00

In valuing stock on March 31, 2013 Rs.1,200/-had been written off a

paticular line of goods which had originally cost Rs.3,600/- and which
were sold in June 2013 fpr Rs.3,500. Except as regards this
transaction the ratio of gross profit had remain unchanged
throughout . Salvage was Rs.10,210/-. Calculate the amount of
insurrance claim to be lodged with the insurance claim.
 Trading A/c
(From
Particulars Amount Particulars Amount

Total - Total -

Step 1 Computing the value of stock

Memorandum Trading A/c

(From 01-01-2013 to 30-03-2013)
Particulars Amount Particulars Amount

Total - Total -
Illustration 21

On 16th June 2015 the premises of Balan were destroyed by fire, but
sufficient records were saved from which the particulars were found:

Stock (1-1-2014) 50,000.00

Stock (31-12-2014) 70,000.00
Purchases (2014) 474,000.00
Sales (2014) 600,000.00
Purchases (1-1-2015 to 16-6-2015) 150,000.00
Sales (1-1-2015 to 16-6-2015) 205,000.00

In valuing the stock for the balance sheet at 31-12-2014 Rs. 4000/-
had been written off certain stock having cost Rs.9,000/-. Half of this
goods were sold in March 2015 for Rs.5,000/-. The balance is
estimated to be worth of original cost. Subject to this exception ,
gross profit had remained at uniform rate. The stock salvaged was
worth Rs.9500/-. Show the amount of claim to be lodged with the
insurance company.
 Trading A/c
(From
Particulars Amount Particulars Amount

Total - Total -

Step 1 Computing the value of stock

Memorandum Trading A/c

(From 01-01-2013 to 30-03-2013)
Particulars Amount Particulars Amount

Total - Total -
Illustration 26

The business premises of Patel Timber Mart Ltd.

destroyed by fire on 15-7-2013.However, the books of
accounts and stock amounting to Rs.18,000/- were
salvaged and the following information was avaialble from
the books

Year Ended Gross Profit (Rs) Sales (Rs.)

3/31/2009 204,250.00 817,000.00
3/31/2010 202,350.00 674,500.00
3/31/2011 190,000.00 760,000.00
3/31/2012 177,650.00 710,600.00
3/31/2013 152,000.00 760,000.00

Additional information:
1. Stock on 31-03-2013 Rs.92,250/-
2. Purchases from 1-4-2013 to 14-7-2013 Rs. 89.250/-
3. Sales from 1-4-2013 to 14-7-2013 Rs. 160,000/-
4. Wages from 1-4-2013 to 14-7-2013 Rs. 28,500/-
5. The amount of policy was Rs.80,000 subject to average
clause.

You are required to prepare a statement of claim against

the insurance company with any comments if necessary
Step 1 Computing the value of stock

Memorandum Trading A/c

(From 01-04-2013 to 14-07-2013)
Particulars Amount Particulars Amount
To Opening Stock 92,250.00 By Sales 160,000.00
To Purchases 89,250.00
To Wages 28,500.00 By Closing Stock (bal fig) 90,000.00
To Gross Profit (1,60,000 x 25/100) 40,000.00

Total 250,000.00 Total 250,000.00

Step 2 : Compute Loss

Value of closing Stock 90,000.00

Less: Salvage Value -18,000.00

Loss 72,000.00

Step 3 : Compute Claim

Claim = Policy / Stock x Loss

Claim = 80,000 /90,000 x 72,000
Claim - Rs.64,000/-
Computation of average Gross Profit Rate

Year Calculation GP Rate (%)

3/31/2009 204250 / 817000*100 25.00
3/31/2010 202350/674500*100 30.00
3/31/2011 190000/760000*100 25.00
3/31/2012 177650/710600*100 25.00
3/31/2013 152000/760000*100 20.00

Average GP Rate = 25+ 30 +25 + 25+20/5

Average GP Rate = 25%
Illustration 30

Baramati Stores closed their books every year on 31st March On 30th April 2016 thire premises
and stock were destroyed by fire. From books of accounts and other records the following
information is obtained. The stock on hand every year has always been valued at 10% less than
the cost.

Particulars 2013-14 2014-15 2015-16 01-04-2016 to 30-04-2016

Opening Stock 270,900.00 324,000.00 360,000.00 369,000.00
Purchases less returns 749,000.00 800,000.00 810,000.00 60,000.00
Sales less returns 1,200,000.00 1,320,000.00 1,400,000.00 120,000.00
Wages 174,000.00 190,000.00 209,000.00 20,000.00
Closing stock 324,000.00 360,000.00 369,000.00 ---

They have taken fire insurance policy of Rs.3,50,000/- and there is an average clause in the
policy. The salvaged goods amounted to Rs.10,000/-.
Find out the amount of claim to be submitted to the insurance company.
 Trading A/C for the years ended
Particulars 2014 2015
To Opening Stock 301,000.00 360,000.00
To Purchases lese returns 749,000.00 800,000.00
To Wages 174,000.00 190,000.00
To Gross Profit (bal fig) 336,000.00 370,000.00
Total 1,560,000.00 1,720,000.00

Year Gross Profit Sales

2013 - 2014 336,000.00 1,200,000.00

2014 - 2015 370,000.00 1,320,000.00
2015 - 2016 391,000.00 1,400,000.00

Step 1 Computing the value of stock

Memorandum Trading A/c

(From 01-04-2016 to 30-04-2016)
Particulars Amount Particulars
To Opening Stock 410,000.00 By Sales
To Purchases 60,000.00
To Wages 20,000.00 By Stock (bal fig)
To Gross Profit (1,20,000 x 28%) 33,600.00
Total 523,600.00 Total

Step 2 Compute Loss

Value of stock 403,600.00
Less: Salvage -10,000.00
Loss 393,600.00

Step 3 : Compute Claim

Claim = Policy / Stock x Loss

Claim = 3,50,000 / 4,03,600 x 3,93,600
Claim = Rs.3,41,328/-
 Trading A/C for the years ended
2016 Particulars 2014 2015 2016
400,000.00 By Sales less return 1,200,000.00 1,320,000.00 1,400,000.00
810,000.00
209,000.00 By Closing Stock 360,000.00 400,000.00 410,000.00
391,000.00
1,810,000.00 Total 1,560,000.00 1,720,000.00 1,810,000.00

Calculation GP Ratio

336000/1200000*100 28.00
370000/1320000*100 28.03
391000/1400000*100 27.93

Average GP Rate = 28+28.03+27.93/3

28.0

6)
Amount
120,000.00

403,600.00

523,600.00
Cost Under Value
100 10 90
X 270900

x= 270900 x 100/90
Illustration 12

A fire occureed in the premises of M/s. Kailash & Co on 30th September 2013.From the following
particulars relating to the period from 01st April 2013to 30th September 2013, you are required to
ascertain the amount of claim to be filed with the Insurance company for the loss of stock. The
company has taken an insurance policy for Rs.75,000/-.The value of goods salvaged is Rs. 27,000/-.
The average rate of gross profit is 20%

Particulars Amount
Opening Stock 120,000.00

Purchases 240,000.00
Wages Paid(Including wages for
installation of machinery-Rs.5000) 75,000.00

Sales 310,000.00
Goods taken for personal use (Sale Value) 25,000.00
Cost of goods sent to consignee on 20th
Sept lying unsold 18,000.00
Free Samples distributed (Cost) 2,500.00
Step 1 Computing the valueMemorandum
of stock Trading A/c
(From 01-04-2013 to 14-07-2013)
Particulars Amount Particulars Amount
To Opening Stock 120,000.00 By Sales 310,000.00

By Goods taken for

To Purchases 240,000.00 personal use (25000-5000) 20,000.00

To Wages 70,000.00 By Consignment Stock 18,000.00

By Goods distributed as
To Gross Profit (20%) 62,000.00 free samples 2,500.00
By Closing Stock (bal fig) 141,500.00

Total 492,000.00 Total 492,000.00

Step 2 : Compute Loss

Value of closing Stock 141,500.00

Less: Salvage Value -27,000.00
Loss 114,500.00

Step 3 : Compute Claim

Claim = Policy / Stock x Loss

Claim = 75000 / 141500 x 114500
60,689.00
Illustration 14

On 18th October 2014, the premises of Mithila were

destroyed by fire , but insufficient records were saved
from which the following particulars were found

Particulars Amount
Stock (01-04-2013) 67,200.00
Stock (31-03-2014) 99,000.00
Purchases (FY 2013-14) 838,800.00
Sales (FY 2013-14) 1,020,000.00
Purchases (01-04-2014 to 18-10-2014) 495,200.00
Sales (01-04-2014 to 18-10-2014) 519,000.00

Stock for the balance sheet at 31-03-2014 was valued

at 10% above cost. During May 2014, Mithila had
withdrawn goods costing Rs. 25,000/-. The policy
amount was Rs.1,20,000/-. The stock salvaged was
worth Rs.29,000/-.Show the amount of claim to be
lodged with the insurance company
 Trading A/c for FY 2013-14
Particulars Amount Particulars
To Opening Stock 67,200.00 By Sales
To Purchases 838,800.00
To Gross Profit 204,000.00
By Closing Stock (99,000 x 100/110)
Total 1,110,000.00 Total

GP Rate = Gross Profit / Sales X 100

GP Rate = 2,04,000 / 10,20,000 X 100 20%

Step 1 Computing the value of stock Memorandum Trading A/c

(From 01-04-2014 to 18-10-2014)
Particulars Amount Particulars
To Opening Stock 90,000.00 By Sales
To Purchases 495,200.00 By Goods withdrawn
To Gross Profit 103,800.00 By Closing Stock (bal fig)

Total 689,000.00 Total

Step 2 : Compute Loss

Value of closing Stock 145,000.00

Less: Salvage Value -29,000.00
Loss 116,000.00

Step 3 : Compute Claim

Claim = Policy / Stock x Loss

Claim = 1,20,000 / 1,45,000 x 1,16000
96000
Amount
1,020,000.00

90,000.00 Cost Value

1,110,000.00 100 10 110
??? 99000

Amount
519,000.00
25,000.00
145,000.00

689,000.00
Question 9

A fire broke out in the premises of Megha Company on

01st July 2013 and stock of the value of Rs.1,57,500/-
was salvaged and the books and records were saved.
The following information was obtained:

Particulars Amount
Stock as on 31st March 2012 420,000.00
Stock as on 31st March 2013 420,000.00
Sales from 1st April to 30th June 2013 510,000.00
Purchases from 1st April to 30th June
2013 315,000.00
Sales for the year ended 31st March
2013 1,500,000.00
Purchases for the year ended 31st
March 2013 900,000.00

Calculate the amount of claim to be submitted to the

Insurance company in respect of loss of stock
 Trading A/c
FY 2012-13
Particulars Amount Particulars
To Opening Stock 420,000.00 By Sales
To Purchases 900,000.00
To Gross Profit (bal fig) 600,000.00
By Closing Stock

Total 1,920,000.00 Total

GP Rate = Gross Profit / Sales x 100

GP Rate = 6,00,000/15,00,000*100 40
Step 1 Computing the value of stock

Memorandum Trading A/c

(From 01-04-2013 to 30-06-2013)
Particulars Amount Particulars
To Opening Stock 420,000.00 By Sales
To Purchases 315,000.00
To Gross Profit 204,000.00 By Closing Stock (bal fig)

Total 939,000.00 Total

Step 2 : Compute Loss

Value of closing Stock 429,000.00

Less: Salvage Value -157,500.00
Loss 271,500.00

Step 3 : Compute Claim

Claim = Policy / Stock x Loss

Claim =4,29,000 / 4,29,000 x 2,71500
271500
Amount
1,500,000.00

420,000.00

1,920,000.00

Amount
510,000.00

429,000.00

939,000.00
Q25

A fire ocuured on 15th April 2014 and destroyed the

business premises of X & Co. The books of accounts and
stock amounting to Rs.1,80,000/-were saved and the
following informtion was available from books:
Step 1 Computing the value of stock

Memorandum
Year Ended Gross Profit (Rs) Sales (Rs.) (From 01-01-2014
3/31/2009 2,150,000.00 8,600,000.00 Particulars
3/31/2010 2,130,000.00 7,100,000.00 To Opening Stock
3/31/2011 2,000,000.00 6,000,000.00 To Purchases
3/31/2012 1,870,000.00 5,500,000.00 To Wages
3/31/2013 1,600,000.00 4,800,000.00 To Gross Profit

Additional information: Total

The stock on 31st December 2013 was valued at

Rs.9,70,000/-. The Purchases, Sales and production wages
from Jan 1. 2014 to April 14, 2014were ascertained at
Rs.7,50,000/-, Rs. 15,90,000/- and Rs. 3,00,000/-
respectively

You are required to prepare a statement of claim against

the insurance company with any comments if necessary Step 2 : Compute Loss

Value of closing Stock

Less: Salvage Value

Loss

Step 3 : Compute Claim

Claim = Policy / Stock x Loss

 Computation of average Gross Profit Rate
g the value of stock

Memorandum Trading A/c

(From 01-01-2014 to 15-04-2014)
Amount Particulars Amount Year GP
970,000.00 By Sales 1,590,000.00 3/31/2009 2,150,000.00
750,000.00 3/31/2010 2,130,000.00
300,000.00 3/31/2011 2,000,000.00
494,967.00 By Closing Stock (bal fig) 924,967.00 3/31/2012 1,870,000.00
3/31/2013 1,600,000.00

2,514,967.00 Total 2,514,967.00

Average GP Rate 25+30+33.33+34+33.33/5

31.13

924,967.00
-180,000.00

744,967.00
average Gross Profit Rate

Sales Calculation GP Rate (%)

8,600,000.00 2150000/8600000*100 25.00
7,100,000.00 2130000/7100000*100 30.00
6,000,000.00 2000000/6000000*100 33.33
5,500,000.00 1870000/5500000*100 34.00
4,800,000.00 1600000/4800000*100 33.33

e 25+30+33.33+34+33.33/5