Stock salvaged Claim rofit Ratio is not given Less: when Gross P nd ans odinthe Premises oF X Ld 0810 10.91. All stocks were destroyed Arcos of, 6.200, From the following igus, ascertain the loss of gcopt tot eer ered by the company’ stork $ Rs. stock on 1.1.90 40,000 Purchases during 1990 1,45,000 sales during 1990 2,00,000 Stockon 31.12.90 25,000 Purchases during 1991 upto the date of fire 1,52,200 Seles during 1991 upto date of fire 1,89,000 [Madras, Adv. Accounts May 1995] Solution: Calculation of ‘Gross Profit Ratio, : ‘Trading A/e for the year ending) 31.12.90 Particulars ‘Amount Particulars | ‘Amount Rs. Rs. ing stock 40,000 | By Sales 2,00,000 r ees 1,45,000 | - Closing Stock 25,000 "Gross Profit e/d (Bal.fig)| _ 40,000 225,000" 2;25,000 __ Gross profit = Gross pro’ «100 Gross profit ratio= * = 40,000, 109 = 20% 2,00,000* Calculation of Stock on the date of fire Memorandum Trading A/c from 1.1.91 to 10.10.94 Particulars Amount Particulars Amount Rs. Rs. To Opening Stock 25,000 | By Sales 1,89,000 nue 1,52,200 + Stock onthe date of fire | 26,000 * Gross Profit o/d 37,800 © al. fi (1,89,000 x 20%) 3 ost 2,15,000 2,15,000‘Stock on the Mae of fre g ote Ry : 26,04, Bets Sone Loss of stock 6.20 mio be thade for Lo Tape ‘Claimo a S05 Wustration6 ing firm caught fire on 22.10.85 fA Toe penises ei ‘ accounts (0 31st December, "4 the “ag damaged. The firth re Rs, 31.12.1984 279 Sake 31121983 O14 Parchase during 1984 45259 Parchase from 1.1.85 to the date of fire 34,897 Sales during 1984 52,009 Sales from 1.1.85 to the date fire 49,179 ial tiercaniion:- f 5 ich cost Rs. 1,000 were given a », > ee pe ay in the books, M8Y for ady %) During 1985, a clerk had misappropriated unrecorded cash sales ti sstmatd that the defalcation amounted to Rs, 400, ‘ ©) The sate of gross profit is constant, E 4 From the sbove information, make an estimate of the stock ON the date fire. (Madras, Solution: Calcsdation ‘oS Gross Profit Ratio B.Com, Mar. 194) Trading Ale for the year ended 31.12.84 Particulars ‘Amount Particulars To Opening Stock + 9614 | By Sales * Purchases 45258 | Closing stock * Gross Profit cig 10,400 (Bal, Figyyr cls nck on the date of fire i moran Trading Ale forthe perod ending 22.10.88 — pasties ‘Amount Particulars Amount Rs. Rs. est 13,272 By Sales 49,170 gp openins® ma Add: Cash sales ponte. 33,827 misappropriated 400 49,570 aa BOY rot 9,914 By Stock on thé date of fire} 7,443 wane tho) (Bal. Fig) Or 37,013 7013 simto bemade: Me ion7 sta" ene premises ofPaswan on 10th May 1996, In order make fi sntheit fire policies in respect of the stock, they ask your advice and you na soot the following information. areablet 1993 1994 en Stork purchases icing sock 15,000 | 16,000 2 Tpectck savaged Was RS. 3,800. Compute the amount of claim. Trading Account 1993 | 199 1995 1993 1994 1995 Rs. Rs. Rs. Rs. Rs. Rs. ‘oping soe 16,000 15,000 | 16,000 By Sales 60,000] 66,000 78,000 Purchases 41,000 | 47,200 56,600) ~ Closing stock] 15,000) 16,000 | 18,000 Gross profit (Bafig) | 18,000 19,800 | 23,400 75,000 | 82,000 | 96,000 75,000| 82,000 96,000 Gross profit Gross Profit Ratio = — x 100 18,000 Gros i _ 18,000 100 = 309 3s Profit Ratio for 1993 = Gp qqq * 100 = 30% 19,800 Gross Profit Ratio for 1994 = Foo9 * 100 = 30% Gross Profi dtc #0093400 so = io for 1995 = 75 999 x 100 = 30% Asthe gross ‘ ken Profit ratio for each one of the preceding three years is 30%, 30% can be the gross profit ratio for the year 1996 also.~___ Memorandum Trading Ave for the Period ending 29 7¢ “Particulars | Amount uae at Poise BY ak et ts igs, > Opening Stoo! + Stock on the d; apdhases 78,000 Ae OF fire 2 (Bal. fi Gross profit (ona) 29,700 i Cale "7 ofamount of claim Re stock on the date of fire 26,709 3,8 Less: Salvage stock Claim 2800 Bw Mhustration 8 ises of Mr. Praveen on 30th June 1996 A fire oceurred on the Pl ck. No stock records have been the greater Pa ms asertned from his books-which ve i fire: ia ‘Accounting year Sales Rs. 1993 12,50,000 1994 8,00,000 1995 9,50,000 1996 2,83,000 Value of stock on 1-1-96 Rs. 75,000 Purchases from 1-1-96 to 30-6-96 “_ Rs.2,60,000 Value of stock salvaged Rs. 10,000 Prepare a statement showing the amount to be claimed from the i company. Solution: Calculation of Gross profit Ratio “3,75,000 For 1993 = 735 ggg * 100= 30% 1,60,000 = 20000 100 = 20% For 1994 = 09 oqp *100=20% 95,000 Fe ate & or 1995 = 5599p % 100 =10% Since the gross profit has declined i io, say, 5 be assed for the 1996. year after year, a still lower ratio, 54Y, 4 ge ‘ al_Rs. i oo Rs. 75,000 | By Sales 2,83,000 2,60,000 | > Stock on the date | of fire (Bal.fig) 66,150 | { | 44,150 | =o | 349,150 39,150 Gatcutation of amount of clair a. A Sock on the date of fire 66,150 stocksal 10,000 snare 56,150 Undervaluation of stock and Average Clause jon 9 i pe ial in the business premises of Raghavan on 19.7.89. From the aricalars ascertain the loss of stock and prepare a claim for insurance. a Rs. Stock on 1.1.88 36,720 Stock on 31.12.88 32,400 Sales for 1988 2,16,000 Purchases for 1988 1,46,400 Purchases from 1.1.89 to 19.7.89 1,76,400 Sales from 1.1.89 to 19.7.89 1,80,000 Thestocks were always valued at 90% of cost. The stock saved from fire was ‘sochRs. 21,600. The amount of the policy was Rs. 75,600. There was an average ese in the policy. Salton: (alulation of Gross Profit Ratio Trading A/c for the year ended 31.12.88 Paniculars | ‘Amount Particulars ‘Amount Oring a 2 tae ' Stock 40,800 |By Sales 16, 36720 EI 32,400 ) | (1) ire laitil ode (2x x100} | 36,000 Gr ‘te 1,46,400 | i 64,80012,15 Gross profit Gros io = Gross pro’ x 100 ss profit Ratio Sales _ 64800. 5 100= 30% = 9,16,000 Calculation of Stock on the date of fire Memorandum ‘trading A/e from 1.1.89 to 19.7.89 Particulars Particulars ji IBy Sales Ti k = one ; Stock on the date of fire Gross Profit (18000030) (Bal.fig) Calculation of actual loss of stock: : ‘Stock on the date of fire 400 Less: Stock Salvaged 21,600 ‘Actual loss of ‘Stock am sJaim under average clause: Cateatation of Claim= ‘Amount of policy __ x Actual loss of Stock Fick onthe dat of fire 7500. 64,800 = Rs. 56,700 36,400 "Claim to bbe made = Rs. 56,700. ‘Treatment of abnormal items IMostration 10 On 1.71988. fire took place in the Godown of Ram Kumar which dest stocks. _ Rs. Sales in 1986 2,00,000 Gross Profitin 1986 60,000 ‘Stock on 1.1.88 2,70,000 Sales from 1,1,88 10 30-6-88 720,000 Additional information; a) Stock as on 31,12,87 had beet aie n undervalued by 10%. b) a ses sang Conducted in March 1988 had "eveal a pape ina damaged condition. 50% one Delance Sales in 1987 Gross Profit in 1987 Purchases from 1.1.88 10 30.6.88 ee [Madras, B-CO™”100 12-87 = 2,70,000 x -S = Rs. 3.00,000 arstock on 3 ate me i a ag For 1987 = 60,000 +30, 000 = Rs. 90,000 i ngnncvrort i co | 90,000 | _ 2 90,000,100 = 30% | gp, Ratio *3,00,000 ~ Oe rofit for 1986 and 1987 = 30%. age? of gross P avert wotes? Rs. 80,000. 50% of the goods are sold at 50% of cost. eg gare dope 809,000 x 50% x 50% = 20.000 mee Rs. ge: 80,000 2 40,000 40,000 Rs. 16,000 + the period ending 30.6.88 Particulars [Normal [Abnormal Total items items | | Rs. . Rs. Rs. Rs. Fipcing wet 220,000 70,000 | 3,00,000 By Sales 17,00,000] 20,000[7,20,000 208 0} | By Gross Loss| — 44,000| 44,000 : (20,000+24,000) spewcheses (4,00,000] 4,00,000| (Transfer to P& LA‘) 4c Gross prosit Tp0%s2,10,000| - | 2.10,000)By Stock on the| thap0o« 30%) date of fire|1,30,000 .16,000|1,46,000 emer (bal.fig) ,30,000| 80,000 | 9,10,000, g,30,000| 80,000] 9,10,000 Statement of Claim Stock on the date of fire:- Rs. Normal Items: 0 0 Abnormal Items: 1,30,00 : 16,000 Sheer 1,46,000 Nil Less: stock, ‘salvaged Claim to be made —— 1,46,000