Question No. 26 - Chapter No.8 - T.S. Grewal +1 Book 2019

Question No 26 Chapter No 8

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.

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.DebitCredit
2018     
4 JanGupta Shawls, Jaipur A/cDr. 16,800 
            To Sales A/c  15,000
            To Output IGST A/c  1,800
 (Being goods sold to Gupta Shawls, Jaipur )   
     
14 JanCash A/cDr. 8,400 
           To Gupta Shawls, Jaipur A/c   8,400
 (Being 50% of due payment received from Gupta Shawls, Jaipur)   
     
10 FebCash A/cDr. 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

Transaction No. 1 Question No.26 Chapter No.8 T.S. Grewal 1 Book 2019 - Question No 26 Chapter No 8 - T.S. Grewal 11 Class
Transaction No. 1 Question No.26 – 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
Gupta Shawls, JaipurPerson  Personal Account Goods received The firm is  receiverDebit
Sales a/c (Goods)  Assets  Real Account  Goods giving by BusinessGoods Goes outCredit 
Output IGST A/c IncomeNominal AccountTax collected from buyer All income and gains Credit 

Transaction No. 2

Transaction No. 2 Question No.26 Chapter No.8 T.S. Grewal 1 Book 2019 - Question No 26 Chapter No 8 - T.S. Grewal 11 Class
Transaction No. 2 Question No.26 – 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
CashAssets  Real Account Cash comes in Comes in Debit
Gupta Shawls, JaipurPerson  Personal Account Making payment The firm is  giverCredit 

Transaction No. 3

Transaction No. 3 Question No.26 Chapter No.8 T.S. Grewal 1 Book 2019 - Question No 26 Chapter No 8 - T.S. Grewal 11 Class
Transaction No. 3 Question No.26 – 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
CashAssets  Real Account Cash comes in Comes in Debit
Gupta Shawls, JaipurPerson  Personal Account Making payment The Firm is  giverCredit 

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T.S. Grewals Double Entry Book Keeping - Question No 26 Chapter No 8 - T.S. Grewal 11 Class

T.S. Grewal’s Double Entry Book Keeping

 

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