Question No. 24 - Chapter No.8 - T.S. Grewal +1 Book 2019

Question No 24 Chapter No 8

Pass Journal entry for purchase of goods by Amrit, Delhi from Add Gel Pens, Delhi for Rs 15,000 less Trade Discount 10% and cash discount 3% CGST and SGST is levied @ 6% each. Assume payment is made at the time of purchase. 

Solution of Question No 24 Chapter No 8: – 

Working Note:

Gross Purchase Price = 15,000/-

Tarde Discount = Purchase Price * % of discount
= 15,000 * 10%
= 1,500/-

Net Purchase Price = Gross Purchase Price – Discount
= 15,000 – 1,500
= 13,500/-

Amount of CGST = Net Purchase Price * % of CGST
= 13,500* 6%
= 810/-

Amount of SGST = Net Purchase Price * % of SGST
= 13,500* 6%
= 810/-

Invoice Value = Net Purchase Price + CGST + SGST
= 13,500 + 810 + 810
= 15,120/-

Cash Discount = Invoice Value * % of Discount
= 15,120 * 3%
= 454/-

Cash discount always availed at the time of payment and trade discount is availed at the time of dealing/trading/ Negotiation. So, in this question, we can avail cash discount when payment is made within a specific time limit.

In the Books of Amrit, Delhi

Date  Particulars
L.F.DebitCredit
 Purchase A/cDr. 13,500 
 CGST Input A/cDr. 810 
 SGST Input A/cDr. 810 
            To Add Gel Pens, Delhi A/c  15,120
 (Being goods purchased from M/s Add Gel Pens, Delhi )   
     
 Add Gel Pens, Delhi A/cDr. 15,120 
           To Cash  A/c   14666
           To Discount Received A/c   454
 (Being payment made to M/s Add Gel Pens, Delhi and receive discount)   
     

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.24 Chapter No.8 T.S. Grewal 1 Book 2019 - Question No 24 Chapter No 8 - T.S. Grewal 11 Class
Transaction No. 1 Question No.24 – Chapter No.8 – T.S. Grewal +1 Book 2019
Name of AccountType of AccountRule which will ApplicableWhat happen in the transactionRule appliedAccording to Rule It will be
Purchase (Goods)  Assets  Real Account  Goods received by businessGoods comes in Debit
CGST Input A/c ExpensesNominal AccountTax collected from buyer All Expenses and lossesDebit 
SGST Input A/c ExpensesNominal AccountTax collected from buyer All Expenses and lossesDebit 
M/s Add Gel Pens, Delhi A/Person  Personal Account Goods givenThey are GiverCredit

Transaction No. 2

Transaction No. 2 Question No.24 Chapter No.8 T.S. Grewal 1 Book 2019 - Question No 24 Chapter No 8 - T.S. Grewal 11 Class
Transaction No. 2 Question No.24 – Chapter No.8 – T.S. Grewal +1 Book 2019
Name of AccountType of AccountRule which will ApplicableWhat happen in the transactionRule appliedAccording to Rule It will be
M/s Add Gel Pens, DelhiA/PersonPersonal AccountReceiving  paymentThey are ReceiverDebit
 CashAssets Real AccountPayment made in cashCash goes outCredit
Discount Received gainNominal AccountDiscount receivedAll income and gainsCredit

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T.S. Grewals Double Entry Book Keeping - Question No 24 Chapter No 8 - T.S. Grewal 11 Class

T.S. Grewal’s Double Entry Book Keeping

 

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