Question

Sold goods costing 40000 to anil for cash at a profit of 25% on cost less 20% trade discount and paid cartage 100 ,which is not to be charged from customer

Answer 1

Answer:

The amount of 40000 will be debited and the amount of 100 will be credited to the Cash account.

Explanation:

Given

The cost price of goods(C.P)=Rs. 40000

Profit of 25%=25% of 40000=Rs. 10000

now the price of goods become=Rs. 40000+Rs. 10000=Rs. 50000

Trade discount=20% of 50000=20/100×50000=Rs. 10000

∴The actual price of sales becomes=Rs. 50000-Rs. 10000=Rs. 40000

Therefore, transactions entry will be:

Cash A/c    Dr             40000

    To Sales A/c  Cr                       40000

Cartage A/c   Dr           100

     To Cash A/c   Cr                       100

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