Question

(1) Purchased goods from Anand * 60,000 and paid central sales tax @ 4%. (1) Sold goods costing 50,000 at a profit of 25% on cost less 10% trade discount.​

Answer 1

Answer:

1) Transaction : Purchased goods from Anand * 60,000 and paid central sales tax @ 4%

 # The given transaction is a credit transaction.

 Journal Entry:

         Purchases A/c ------------------Dr            60000

         Sales Tax A/c--------------------Dr               2400

                     To Anand A/c                                            62400

        ( Being goods purchased from anand and sales tax paid)

2) Transaction :  Sold goods costing 50,000 at a profit of 25% on cost less 10% trade discount

 # The given transaction is a cash transaction.

 Journal Entry:

         Cash  A/c ------------------------Dr            56250

                     To Sales A/c                                           56250

        ( Being Sold goods at a profit of 25% on cost less 10% trade discount)

Explanation:

In Transaction trade discount is calculated on cost and is not considered in the books of account. Therefore, Amount is Calculated

(50000×90%)*125% = Rs.56250