Question No 16 Chapter No 8 - T.S. Grewal 11 Class

Question No 16 Chapter No 8

M/s Auto Aid, Delhi purchased 500 pieces of car horns @ Rs 200 each less 10% Trade discount plus IGST @ 12% from M/s Auto Horns, Chandigarh. What is the Invoice value?

Solution: –

Working Note: –

We will use the following formulas

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Invoice Price = Net Sale Price + GST
Net Sale Price = Gross Sale Price – Trade Discount

Gross Sale Price = 500*200
= 1,00,000

Net Sale Price = 1,00,000 – (1,00,000 * 10%)
= 1,00,000 – 10,000
= 90,000/-

Invoice Price = 90,000 + (90,000 * 12%)
= 90,000 + 10,800
= 1,00,800/-

In the Books of M/s Auto Aid, Delhi

Date	Particulars		L.F.	Debit	Credit
	Purchase A/c	Dr.		90,000
	IGST input A/c	Dr.		10,800
	To M/s Auto Horns A/c				1,00,800
	(Being goods purchased from M/s Auto Horns )

Explanation of All Transactions with images: –

This is not a part of the solution, So you don’t have to write it in the exam. So, why we explained if it is not needed. Because This explanation will help you to understand all transactions with logic and you don’t need to remember all the transactions but just understand and remember the logic use behind it.

Transaction No. 1

Name of Account	Type of Account	Rule which will Applicable	What happen in the transaction	Rule applied	According to Rule It will be
Purchase (Goods)	Assets	Real Account	Goods received by business	Goods comes in	Debit
CGST Input A/c	Expenses	Nominal Account	Tax collected from buyer	All Expenses and losses	Debit
SGST Input A/c	Expenses	Nominal Account	Tax collected from buyer	All Expenses and losses	Debit
M/s Auto Horns	A/Person	Personal Account	Goods given	They are Giver	Credit