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Journalise the transaction: sold goods purchased at list price of 50,000 less 15% trade discount sold at 25% profit less 10% trade discount against cheque. Pls provide working note if possible?
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Journalise the transaction: sold goods purchased at list price of 50,0...
Journal Entry for Selling Goods with Trade Discounts and Profit
The transaction involves selling goods that were purchased at list price with trade discounts and then selling them at a profit. The customer paid using a cheque.
HTML Bold Tag: Journal Entry
Journal Entry:
Date | Particulars | L.F. | Debit | Credit
--- | --- | --- | --- | ---
[Date] | Bank A/c | Dr. | [Amount received] | -
[Date] | Sales A/c | Dr. | - | [Selling price of the goods]
[Date] | Trade Discount A/c | Dr. | - | [Trade discount given to the customer]
[Date] | Profit and Loss A/c | Dr. | - | [Profit earned on the sale]
[Date] | Purchases A/c | Cr. | [Purchase price of the goods] | -
[Date] | Trade Discount Received A/c | Cr. | [Trade discount received from the supplier] | -
Working Notes:
1. Purchase:
- List price of goods = Rs. 50,000
- Trade discount = 15% of list price
- Purchase price after trade discount = Rs. 42,500
2. Selling:
- Profit on selling price = 25%
- Trade discount = 10% of selling price
- Selling price after trade discount = Rs. 59,062.50
- Cost of goods sold = Rs. 42,500
- Profit earned on selling = Rs. 16,562.50
Explanation:
The journal entry records the sale of goods purchased at a list price of Rs. 50,000 with a trade discount of 15%. The purchase price after the trade discount was Rs. 42,500, which is credited to the purchases account. The trade discount received from the supplier is credited to the trade discount received account.
The goods were then sold at a profit of 25% on the selling price, which amounted to Rs. 59,062.50. A trade discount of 10% was given to the customer, and the trade discount amount is debited to the trade discount account. The selling price, after deducting the trade discount, is credited to the sales account.
The profit earned on the sale is credited to the profit and loss account. Finally, the bank account is debited for the amount received by cheque from the customer.
The transaction involves selling goods that were purchased at list price with trade discounts and then selling them at a profit. The customer paid using a cheque.
HTML Bold Tag: Journal Entry
Journal Entry:
Date | Particulars | L.F. | Debit | Credit
--- | --- | --- | --- | ---
[Date] | Bank A/c | Dr. | [Amount received] | -
[Date] | Sales A/c | Dr. | - | [Selling price of the goods]
[Date] | Trade Discount A/c | Dr. | - | [Trade discount given to the customer]
[Date] | Profit and Loss A/c | Dr. | - | [Profit earned on the sale]
[Date] | Purchases A/c | Cr. | [Purchase price of the goods] | -
[Date] | Trade Discount Received A/c | Cr. | [Trade discount received from the supplier] | -
Working Notes:
1. Purchase:
- List price of goods = Rs. 50,000
- Trade discount = 15% of list price
- Purchase price after trade discount = Rs. 42,500
2. Selling:
- Profit on selling price = 25%
- Trade discount = 10% of selling price
- Selling price after trade discount = Rs. 59,062.50
- Cost of goods sold = Rs. 42,500
- Profit earned on selling = Rs. 16,562.50
Explanation:
The journal entry records the sale of goods purchased at a list price of Rs. 50,000 with a trade discount of 15%. The purchase price after the trade discount was Rs. 42,500, which is credited to the purchases account. The trade discount received from the supplier is credited to the trade discount received account.
The goods were then sold at a profit of 25% on the selling price, which amounted to Rs. 59,062.50. A trade discount of 10% was given to the customer, and the trade discount amount is debited to the trade discount account. The selling price, after deducting the trade discount, is credited to the sales account.
The profit earned on the sale is credited to the profit and loss account. Finally, the bank account is debited for the amount received by cheque from the customer.
Community Answer
Journalise the transaction: sold goods purchased at list price of 50,0...
Purchases a/c Dr 42500
To cash a/c 42500
(being goods purchased)
bank a/c Dr 47812
To sales a/c 47812
(being goods sold )
working note :
purchases = 50000- 7500=42500
(trade discount of 15%on 50000=7500)
sales = 42500+ 10625=53125
(add:profit 25%of 42500= 10625)
=53125- 5313= 47812
(less:trade discount of 10% on 53125=5312.5=5313)
To cash a/c 42500
(being goods purchased)
bank a/c Dr 47812
To sales a/c 47812
(being goods sold )
working note :
purchases = 50000- 7500=42500
(trade discount of 15%on 50000=7500)
sales = 42500+ 10625=53125
(add:profit 25%of 42500= 10625)
=53125- 5313= 47812
(less:trade discount of 10% on 53125=5312.5=5313)
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Journalise the transaction: sold goods purchased at list price of 50,000 less 15% trade discount sold at 25% profit less 10% trade discount against cheque. Pls provide working note if possible?
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