Question No 26 Chapter No 8 - T.S. Grewal 11 Class

Question No 26 Chapter No 8

Table of Contents

Solution of Question No 26 Chapter No 8: –

Explanation of All Transactions with images: –

Oswal Woollen Mills, Amritsar(Punjab) sold shawls to Gupta Shawls, Jaipur as per details: Sold 100 shawls @ Rs 200 per shawl on 4th January, 2018, IGST is levied @ 12%. Trade Discount 25% and Cash Discount 5% if full payment is made within 14 days. Gupta Shawls sent 50% of the payment on 14th January, 2018 and balance payment on 10th February, 2018. Pass Journal entries.

Solution of Question No 26 Chapter No 8: –

Gross Sale Price = 100 * 200

= 20,000/-

Tarde Discount = Sale Price * % of discount
= 20,000 * 25%
= 5,000/-

Net Sale Price = Gross Sale Price – Discount
= 20,000 – 5,000
= 15,000/-

Amount of IGST = Net Sale Price * % of IGST
= 15,000 * 12%
= 1,800/-

Invoice Value = Net Purchase Price + IGST
= 15,000 + 1,800
= 16,800/-

In this question, Gupta Shawls, Jaipur cannot avail cash discount because there is a condition in the question for availing cash discount which Gupta Shawls, Jaipur did not fulfil. This condition is shown below:

Cash Discount 5% if full payment is made within 14 days.

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But, Gupta Shawls Jaipur paid only 50% amount within 14Days.

In the Books of M/s Oswal Woollen Mills, Amritsar(Punjab)

Date	Particulars		L.F.	Debit	Credit
2018
4 Jan	Gupta Shawls, Jaipur A/c	Dr.		16,800
	To Sales A/c				15,000
	To Output IGST A/c				1,800
	(Being goods sold to Gupta Shawls, Jaipur )

14 Jan	Cash A/c	Dr.		8,400
	To Gupta Shawls, Jaipur A/c				8,400
	(Being 50% of due payment received from Gupta Shawls, Jaipur)

10 Feb	Cash A/c	Dr.		8,400
	To Gupta Shawls, Jaipur A/c				8,400
	(Being balance of due payment received from Gupta Shawls, Jaipur)

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
Gupta Shawls, Jaipur	Person	Personal Account	Goods received	The firm is receiver	Debit
Sales a/c (Goods)	Assets	Real Account	Goods giving by Business	Goods Goes out	Credit
Output IGST A/c	Income	Nominal Account	Tax collected from buyer	All income and gains	Credit

Transaction No. 2

Name of Account	Type of Account	Rule which will Applicable	What happen in the transaction	Rule applied	According to Rule It will be
Cash	Assets	Real Account	Cash comes in	Comes in	Debit
Gupta Shawls, Jaipur	Person	Personal Account	Making payment	The firm is giver	Credit

Transaction No. 3

Name of Account	Type of Account	Rule which will Applicable	What happen in the transaction	Rule applied	According to Rule It will be
Cash	Assets	Real Account	Cash comes in	Comes in	Debit
Gupta Shawls, Jaipur	Person	Personal Account	Making payment	The Firm is giver	Credit

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Question No 26 Chapter No 8 – T.S. Grewal 11 Class

Solution of Question No 26 Chapter No 8: –

Explanation of All Transactions with images: –

Transaction No. 1

Transaction No. 2

Transaction No. 3

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