Question

Record the following transactions in the journal : (i) Bought goods from Gopi & Co. of list price ₹ 20,000 at 10% TradeDiscount plus CGST and SGST @ 6% each. (ii) Bought goods from Mona & Co. of list price ₹ 30,000 at 20% TradeDiscount and 25% Cash Discount. IGST paid on it was @ 12%. Paid by cheque. (iii) Sold goods costing ₹ 40,000 at a profit of 25% on cost less 20% TradeDiscount and 2% Cash Discount to Maya & Sons, Paid CGST and SGST@ 6% each. It paid the amount by cheque to avail CashDiscount. (iv) Outstanding rent of previous year ₹ 10,000 is paid by cheque. (v) Machine purchased of 80,000 from mahindra Ltd and paid ₹ 20,000 for installation expenses. (vi) Goods purchased from Gopi & Co. of list price ₹ 33,000 were given ascharity to a N.G.O. (vii) Electricity charges paid by chequefrom saving account ₹ 25,000 (viii) Legal fee paid ₹ 38,000, stationery expenses paid ₹ 2,000.

Answer 1

Here is how you can record the transactions in the journal:

(i) Bought goods from Gopi & Co. of list price ₹ 20,000 at 10% TradeDiscount plus CGST and SGST @ 6% each.

Journal entry:

Debit: Purchases (₹ 20,000 - 10% Trade Discount + 6% CGST + 6% SGST) = ₹ 19,400

Credit: Gopi & Co. (₹ 19,400)

(ii) Bought goods from Mona & Co. of list price ₹ 30,000 at 20% TradeDiscount and 25% Cash Discount. IGST paid on it was @ 12%. Paid by cheque.

Journal entry:

Debit: Purchases (₹ 30,000 - 20% Trade Discount - 25% Cash Discount + 12% IGST) = ₹ 21,900

Credit: Mona & Co. (₹ 21,900)

(iii) Sold goods costing ₹ 40,000 at a profit of 25% on cost less 20% TradeDiscount and 2% Cash Discount to Maya & Sons, Paid CGST and SGST@ 6% each. It paid the amount by cheque to avail CashDiscount.

Journal entry:

Debit: Maya & Sons (₹ 40,000 + 25% profit on cost - 20% Trade Discount - 2% Cash Discount + 6% CGST + 6% SGST) = ₹ 47,500

Credit: Sales (₹ 47,500)

(iv) Outstanding rent of previous year ₹ 10,000 is paid by cheque.

Journal entry:

Debit: Rent Expense (₹ 10,000)

Credit: Bank (₹ 10,000)

(v) Machine purchased of 80,000 from mahindra Ltd and paid ₹ 20,000 for installation expenses.

Journal entry:

Debit: Machinery (₹ 80,000)

Credit: Bank (₹ 80,000)

Debit: Installation Expense (₹ 20,000)

Credit: Bank (₹ 20,000)

(vi) Goods purchased from Gopi & Co. of list price ₹ 33,000 were given ascharity to a N.G.O.

Journal entry:

Debit: Purchases (₹ 33,000)

Credit: Gopi & Co. (₹ 33,000)

Debit: Charity Expense (₹ 33,000)

Credit: Purchases (₹ 33,000)

(vii) Electricity charges paid by cheque from saving account ₹ 25,000

Journal entry:

Debit: Electricity Expense (₹ 25,000)

Credit: Bank (₹ 25,000)

(viii) Legal fee paid ₹ 38,000, stationery expenses paid ₹ 2,000.

Journal entry:

Debit: Legal Fee Expense (₹ 38,000)

Credit: Bank (₹ 38,000)

Debit: Stationery Expense (₹ 2,000)

Credit: Bank (₹ 2,000)

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