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

Question No. 16 - Chapter No.8 - T.S. Grewal +1 Book 2019

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

  1. Invoice Price = Net Sale Price + GST 
  2. 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

Transaction No. 1 Question No.16 Chapter No.8 T.S. Grewal 1 Book 2019 1 - Question No 16 Chapter No 8 - T.S. Grewal 11 Class
Transaction No. 1 Question No.16 – Chapter No.8 – T.S. Grewal +1 Book 2019
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

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