Question

Prepare journal entry - Sold goods to Alam costing ₹ 60000 at a profit of 20% on sales less 10% trade discount and charge 8% GST.

Answer 1

Let the sale price be X

Profit is 20%(X)

Cost Price + Profit = Sale Price

Rs.60,000 + 20%X = X

X - 20%X = Rs.60,000

0.8X = Rs.60,000

X = Sale price = Rs.75,000

Trade Discount = 10%( Rs.75,000) = Rs.7500

Agreed Price = Rs.75,000- Rs.7500 = Rs.67,500

CGST @ 8% = Rs. (67,500) 8% = 5400

SGST = CGST = Rs.5400

Invoice Price = Agreed Price + GST =Rs.78,300

Journal Entry

Alam A/C     Dr    Rs.78,300

    To Sales A/C    Rs.67,500

    To Output CGST A/C   Rs.5400

    To Output SGST A/C   Rs.5400

(Being goods sold to Alam)

    To Output CGST A/C  Rs.5400

    To Output GST @