Ramesh consigned 2,000 kg of chemicals at a cost of Rs. 800 per kg to John. Ramesh paid freight and insurance charges of Rs. 20,000. of the above , 500 kg were destroyed by fire during transit . John cleared the balance of 1,500 kg of chemicals. John incurred the following expenses; Godown rent Rs. 5,000, Insurance Rs. 3,000 clearing charges Rs. 4,500. Insurance claim received against fire Rs. 4,00,000 after admitting the salvage value Rs. 10,000. For abnormal loss Consignment A / c will be credited by _____________.

The correct option is B Rs. 3,95,000

Cost of good per unit $=$ Rs $800$ per kg

Number of goods lost in transit $=$ $500$ kg

Cost of goods lost in transit $=$ Cost of good per unit $\times$ Number of goods lost

$=$ $800\times 500$

$=$ $4,00,000$

Insurance received $=$ $4,00,000$

Expenses incurred on lost goods $=$ $20,000\times \frac{500}{2,000}$

$=$ $5,000$

Net loss on abnormal account $=$ Cost of goods lost in transit $+$ expenses incurred $-$ Insurance recieved

$=4,00,000+5,000-4,00,000=5,000$.