Question

Question 23.
Pass Journal entry for purchase of goods by Amrit, Delhi from Ayur Products, Agra, (UP) for ₹ 25,000 less Trade Discount @ 15% plus IGST @ 12%.

Answer 1

Answer:

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Answer 2

The journal entry for the following is shown below:

Explanation:

The journal entry to record the purchase of the goods by Amrit is as follows:

Purchase A/c..................................Dr  Rs 21,250

Input IGST A/c................................Dr  Rs 2,550

      To Ayur Products A/c...........................Cr  Rs 23,800

Being the goods purchased or bought by Amrit is recorded from Ayur products

As the goods are bought, this will increase the inventory which is an assets for the business and any increase in asset is debited. So, the purchase account is debited. And on the purchase GST is applied so, the account of Input IGST is debited. And the sale account which is Ayur product is credited as goods purchased from Ayur.

NOTE: Purchase amount involve the amount less the discount.

Working Note:

Input IGST = (Purchase amount - discount) × 12%

= ($25,000 - $3,750)  × 12%

= $21,250  × 12%

= $2,550