Offline Marathon November 23
Offline Marathon November 23
Offline Marathon November 23
bus prem
alternate
X
- - X
⑮aa
i X
H
19 ⑧
O
-
31 12 20
- -
-
-
!
Turnover
↓
stock
↓
LOSS /
Profit
-
calculate
-
-
3
10 Turnover *
Loss or Profit .
20 In in cow
Redn in F Inc in
x 3 C ->
profit
. .
. .
-
LOP
-
CA Tejas Suchak
Loss of Profit
Reduction in Turnover
1.4.17 1.8.17
⑭ex
30.9.17 31.3.18
Preceding
Financial Year Standard Turnover= 25,00,000
8
-
-
-
30 . 9018
Current
Actual = 2,00,000
Financial Year
fixed Expenses
= (Net Profit + Insured Standing Charges) * 100
Turnover of Preceding Financial Year
-
0
TW ↑R Prem *
03
S = -
↓ R
P CS
-
Pree I
=
DE
⑧
GP FE =
100000
= %
-
-
- -
GP
- 0
70008
* I
o
/
IDE
-
-
-> y
0 X x -
-
x xx &
e X-E . X
-
--
-
Increase in Cost of Working
50000
- ·
Or
~
Rent %
1. Actual cost =>
S0000
S
- -> 150000 x 15
-7
= 22500
M
Rate -
22500
=
/
the 3 is
3. Actual Cost * Net Profit + Insured Standing⑫ permissible
Charges
Net Profit + Insured Standing Charges +
⑮
-
-
I
=
=
OR Actual Lost =
5000 X
ISC +
-
VISL
Standing Charges -
⑮
ANNUAL ADJUSTED TURNOVER
Annual
Adjusted To x GPR+Uninsured sc TS
is us
->
CA Tejas Suchak
Average Clause
200000 -- Ul --250000 -
-
- -
2.Insured Sum
-
1.Insurable Sum
-
-
-
158000
x 150000 x
200000/250000
=
,
3.Loss of Profit
4.Claim = Loss of Profit * -
Insured Sum
Insurable Sum
Fr
·
-
m
12m To
-
(Annual) x
Adjusted GPR
trend
-
Ant
-
-
x Ad
--
GPR
10.28 ACCOUNTING
Illustration 10
The premises of XY Limited were partially destroyed by fire on 1st March, 20X2 and
as a result, the business was practically disorganized upto 31st August, 20X2. The
company is insured under a loss of profits policy for ` 1,65,000 having an indemnity
period of 6 months.
-
↳ Sum
--
Ins
-
C
-
C
- - -
- -
-
-
-
-
-
- -
-
-
=
Due to substantial increase in trade, before and up to the time of the fire, it was
O
agreed that an adjustment of 10% should be made in respect of the upward trend in
-
⑧
- - --
-
immediately after the fire and but for this expenditure, the turnover during the period
- -
-
O
-
--- -
of dislocation would have been only ` 55,000. There was also a saving during the
-
0
- - -
⑳
- -
D
-
- - -
Solution
25000
Computation of loss of profit Insurance claim ->
`
(1) Rate of gross profit:
Net profit for the last financial year 90,000
Add: Insured standing charges 60,000
1,50,000
↳P
-
10 Red in TO : .
Redu in To x
Adjusted
"
GPR
55200
184000 X 30/ -
/
- -
20 Inc in.
cow 7500
in insured (2 ,00)
3 less :
savings s
Loss of
Profit 60000
I
Reduction in To -Stand To -
Actual To
- 264000-20000
-
184000
/ ~
R A
103 21 .
31 8.21 -
# -
240008
40/
" -
i 264000 -
-
D D
1 3-22
. 3118 22 .
1 -
↓
Actua To 80000 -b
->
=
80000
&
X X
i
AdjusGPR : - As
35000 25800
S
-N
-
11110 of PFY
500000
P
- 30 %
+O
- 30%
CA Tejas Suchak
CA INTERMEDIATE
Increase in cow
1 .
Actual cost =
9300
2 .
Redn in to avoided x AGPR =
25000 x 30% : 7500
Adjusted (ius)
.
3 Actual cost x Annual To X
Annual
Adjusted To x AGPR+UISC
9300 X 600000 x 30 %
-
9-
Annual
Adjusted To
1
1 3 22 % .
12M
men
600000
+
-
-
Insurance claim
103 22
-
r
I
I opt
12m TO x AGPR
AATO X AGPR
30%
=
660 000
,
X
= 198000 =
16500
- I
Loss of
Profit Claim =
60000 x 105000/198000
-
-
60000
---
=
&
CA Tejas Suchak
CA INTERMEDIATE
P = 60000
S
10 184000 x 38% =
55200
I
20 ICOW = 750
,
B less : =
LOP
-
ST-0 ATO
Redn in TO - 264000
. 20000
. . .
- 184000
I I
PFY 31 8 21
1 13 21
·
.
-
240000
o-
·
I 1
CAN
1 3 22
- . 31 -8 22 .
Actual TO :
20000
I
Adj #y
-Ye
GPR :
x100
=
90000 + 60000 x 100
-I
500000 500000
- -
=30 % =
304 E
Inco in cow
G
1 .
Actual lost :
9300
2 .
RITAX AGPR =
25000 x 30 % =
750
.
3 Actual Lost X AATO x AGPR -
o
A ATO
-
-
-
600000
, (10%x 600000)
+
- 660000
-
CA Tejas Suchak
10.30 ACCOUNTING
(5) Claim: `
Loss of profit on short sales (30% on ` 1,84,000) 55,200
Add: Allowable additional expenses 7,500
62,700
Less: Savings in insured standing charges (2,700)
60,000
Application of average clause
` 1,65,000
` 60,000 × ` 1,98,000 50,000
Illustration 11
Sony Ltd.’s. Trading and profit and loss account for the year ended 31 st December,
20X1 were as follows:
Trading and Profit and Loss Account for the year ended 31.12.20X1 -
-
` - `
25
C
/
F
To Opening stock 20,000 By Sales
-
10,00,000
-
O
= -
the premises and the entire stock were gutted with nil salvage value. The net quarter
-
-
sales i.e. 1.4.20X2 to 30.6.20X2 was severely affected. The following are the other
- -
information:
-
-
-
-
212500 X ST .
2 .
Increase in cow 4375
I
3 less
savings in insured
standing o 0
. :
LOP 15000
Reduction in Turnover
*
217391
,
N
1000000 ·
I
14
21782889
.
/ I
30 6 21
. .
31 12-21
.
↑D
.
A
22
.
260870 c
I W
/
R 100
% 217391
00
=
->
I -
4
P D
104 22 .
30 6 22
- .
L I
Actual TO 87500 =
=Stan . Actual
=
300000 -
87500
=212500
-
Adjusted GPR
x 100
+
=
150000 x100 ↑
1000000
-
- 101
-
-
CA Tejas Suchak
CA INTERMEDIATE
Increase in cow
%.
2 Redu in To avoided Adjusted GPR 27500 5
4375
.
x =
x =
Annual 1SC+UISC
Any Tox
1
AGPR+ VISC
=
60000 X 1150000 x 57 :
,
-
150000 x
·
% . + 130000
·
-
18400
L
Annual
Adjusted To
X 2173al
·
X I
250000
· I
t
in 21
N I I
101 21
-
1000000 31 12 21
. .
1 4 - 22
-
S
~
P O
1000000-217391 + 250000
1 -
250000(1022)
·
782609(2021) +
=
%
+ 15
-
900000 + 150000
-
-
= 1150000
-
Insurance Claim
r
104 22.
1-
12M Profit
AATO X AGPR
=1150000 x
-
St .
-100000
-
=>
57500
↑
Loss of
Profit claim =
15000
v
=
15008
S
CA Tejas Suchak
CA INTERMEDIATE
Loss of stock
or
↓
(1 422)
Trading
1 . =>
als on DOF -
Xe
a rain
-
OS 90000 S 250000
L -
&
↑ 300000
-
&
cs(bal) 260000
↑
↑
* E 70000
-
(DOF)
GP (20%) 50000
/
2 .
LOSS : CS 200000
-
SY 0
-
LOSS 260000
-
.
3 : I
-
CA Tejas Suchak
INSURANCE CLAIMS FOR LOSS OF STOCK AND LOSS… 10.31
I If
Sales during the period 1.1.X2 to 31.3.X2 2,50,000
I I
e -
I
- -
-
- - -
R
~
~
- -
-
I
I
- -
N
-
Manufacturing expenses
- 1.1.X2 to 31.3.X2
- -
70,000
=
I
-
- -
i
-
O
- - - -
-
=> - -
-
-
u
==
-
The general trend of the industry shows an increase of sales by 15% and decrease in
O
-
-
-
-
-
-
Solution
Calculation of loss of stock:
Sony Ltd.
Trading A/c
for the period 1.1.20X2 to 31.3.20X2
` `
To Opening stock 90,000 By Sales 2,50,000
To Purchases 3,00,000 By Closing stock 2,60,000
To Manufacturing expenses 70,000 (balancing figure)
To Gross profit (20% ∗ of 50,000
` 2,50,000) (W.N.3)
5,10,000 5,10,000
`
Stock destroyed by fire 2,60,000
Amount of fire policy 3,00,000
As the value of stock destroyed by fire is less than the policy value, the entire claim
will be admitted.