Question

sold goods to Ajay for rupees 50000 allowing 5% cash discount and 10% trade discount. half of the amount was received by cheque within specificed time .

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Answer 1

Answer:

sales A/c dr. 42500

cash discount 2500

trade discount 5000

Answer 2

The general entities are

Ajay a/c Dr........21375

Bank a/c Dr......21375

Cash Discount a/c Dr ...2250

To Sales a/c.$Rs. 45000$

Given:

Sold good to Ajay for rupees 50,000

Ajay got 5% cash discount and 10% trade discount.

Explanation:

Let's first calculate trade discount,

$50,0000 * 10 \%=5000$ (trade discount is not shown in books of accounts)

So price of goods comes $50,000-50000=45000$

Now cash discount $=5 \%$ on 45000 (Cash Discount is shown in books) so $5 \%$ is$45000^{*} 5 \%=2250$

Now the price of goods comes to $=45000-2250=42750$

Now coming to amount received is $50 \%$by cheque $\& 50 \%$ still remaining

So $50 \%$ of $42750=21375$

And remaining $50 \%=42750$

So now coming to journal entry is

Goods sold so goods goes out so it will be credited cash comes in form of bank and cash so it's Debited and still $50 \%$ amount is remaining to take from Ajay so Ajay is our debtor and it will be debited

So coming to journal entry:-

Ajay a/c Dr........21375

Bank a/c Dr......21375

Cash Discount a/c dr ..2250

To Sales a/c.$Rs. 45000$

(Being Goods sold and half payment received)

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