Question

sold good costing rs 40000 to anil for cash at profit of 25percent on cost less 20percent trade discount and paid cartage rs 100 which is not to be charged from customer

Answer 1

Cost price = Rs.40,000

Profit = 25% on cost = 25%( 40,000) = Rs.10,000

List price = Cost price + Profit = Rs.40,000 + Rs.10,000 = Rs.50,000

Trade discount = 20%( List price ) = 20%(50,000) = Rs.10,000

Invoice price = list price - trade discount = Rs. 50,000 - Rs.10,000 = Rs.40,000

Journal Entry :

Anil A/C  Dr    Rs.40,000

Cartage A/C   Dr Rs.100

       To  Cash A/C   Rs.100

       To Sales A/C  Rs.40,000

(being goods sold to Anil and cartage paid)