Question

purchased goods from krish and paid 51200 including gst with 14% sgst and sgst

Answer 1

Answer:

Purchases ac ....dr. 44,912

Input SGST ac ....dr. 3,144

Input CGST ac ....dr. 3,144

To Krish ac 51,200

Explanation:

total money involved is 51,200.

they've said 14% tax is included in 51,200.

to put it in perspective,

price of goods that I have purchased + tax on those goods —> total to be paid to Krish.now the figure 51200 is price+tax. we have to first segregate them. how?

51200 ÷ 1.14 = 44,912 (cost of goods; purchases ac dr)

now tax will be 51200 - 44912 = 6,288 (sgst + cgst)

now segregate the taxes further, just split them into 2 :

6,288 ÷ 2 = 3144

so price of goods will go to Purchases Ac dr 44,912 , taxes will go to Input Taxes ac dr— INPUT CGST dr 3144 & INPUT SGST dr 3144

on the credit side, it is a credit transaction, NOT cash transaction as creditor's name is mentioned instead of "cash/bank", To Krish ac (total amount; 51,200).

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