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Sold goods costing rs40000 to anil a current dated cheque at a profit of 225 on cost less 220trade discount IGST @18%.cash discount is allowed @ 2%?
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Sold goods costing rs40000 to anil a current dated cheque at a profit ...
Method to Solve :
Given Cost Price = 40000
Profit rate = 25%
Profit= Cost Price � Profit rate
= 40000 � 25% = 10000
List Price= Cost Price + Profit
= 40000 + 10000 =50000
Trade Discount rate = 20%
Trade Discount amount= List price � Trade Discount rate..
=50000 � 20 % = 10000
Actual Sale Price = List Price - Trade Discount amount
=50000 - 10000 = 40000
cash discount allowed =2%
40000�2% = 800
Net Amount - discount = 40000 -800 = 39200
Gst = 39200�2% = 4704
The Three golden rules of accounting are
Personal account - Debit the receiver credit the giver
Nominal account - Debit All expenses and losses, credit All incomes and gains
Real account - Debit what comes in, credit what goes out
bank ccount is a real account ..(all assets and Liabilities come under Real account.. cash is a real account)
discount allowed account and Sales account are nominal accounts...(all expenses incomes gains losses come under nominal account.. discount is a loss, sales is an income)
in contention with the above rules...The Journal entries will be...
Bank a/c Dr 48608
discount allowed a/c Dr 800
To sales account 40000
To Output CGST a/c 4704
To output SGST a/c 4704
(being goods sold)
Profit rate = 25%
Profit= Cost Price � Profit rate
= 40000 � 25% = 10000
List Price= Cost Price + Profit
= 40000 + 10000 =50000
Trade Discount rate = 20%
Trade Discount amount= List price � Trade Discount rate..
=50000 � 20 % = 10000
Actual Sale Price = List Price - Trade Discount amount
=50000 - 10000 = 40000
cash discount allowed =2%
40000�2% = 800
Net Amount - discount = 40000 -800 = 39200
Gst = 39200�2% = 4704
The Three golden rules of accounting are
Personal account - Debit the receiver credit the giver
Nominal account - Debit All expenses and losses, credit All incomes and gains
Real account - Debit what comes in, credit what goes out
bank ccount is a real account ..(all assets and Liabilities come under Real account.. cash is a real account)
discount allowed account and Sales account are nominal accounts...(all expenses incomes gains losses come under nominal account.. discount is a loss, sales is an income)
in contention with the above rules...The Journal entries will be...
Bank a/c Dr 48608
discount allowed a/c Dr 800
To sales account 40000
To Output CGST a/c 4704
To output SGST a/c 4704
(being goods sold)
This question is part of UPSC exam. View all Commerce courses
Most Upvoted Answer
Sold goods costing rs40000 to anil a current dated cheque at a profit ...
Selling Goods to Anil
Cost of Goods
- The goods were sold to Anil at a profit of Rs. 225 on cost.
- The cost of the goods sold is Rs. 40,000.
Trade Discount
- A trade discount of Rs. 220 was given on the cost of the goods.
- Trade discounts are offered to customers to encourage bulk purchases or for other reasons such as building customer loyalty.
IGST
- Integrated Goods and Services Tax (IGST) is applicable on the sale of goods.
- The IGST rate is 18%.
- IGST is a tax levied on goods and services that are sold and supplied from one state to another.
Cash Discount
- A cash discount of 2% is allowed on the selling price of the goods.
- Cash discounts are given to customers as an incentive for prompt payment.
Calculation of the Selling Price
1. Selling Price = Cost Price + Profit
- Selling Price = Rs. 40,000 + Rs. 225 = Rs. 40,225
2. Selling Price after Trade Discount = Selling Price - Trade Discount
- Selling Price after Trade Discount = Rs. 40,225 - Rs. 220 = Rs. 40,005
3. IGST = Selling Price after Trade Discount * IGST Rate
- IGST = Rs. 40,005 * 18% = Rs. 7,200.90 (rounded to Rs. 7,201)
4. Selling Price with IGST = Selling Price after Trade Discount + IGST
- Selling Price with IGST = Rs. 40,005 + Rs. 7,201 = Rs. 47,206
5. Cash Discount = Selling Price with IGST * Cash Discount Rate
- Cash Discount = Rs. 47,206 * 2% = Rs. 944.12 (rounded to Rs. 944)
6. Final Selling Price = Selling Price with IGST - Cash Discount
- Final Selling Price = Rs. 47,206 - Rs. 944 = Rs. 46,262
Summary
- The goods were sold to Anil for a total selling price of Rs. 46,262.
- The cost of the goods was Rs. 40,000.
- A trade discount of Rs. 220 was given on the cost.
- IGST at a rate of 18% was applied to the selling price after the trade discount.
- A cash discount of 2% was allowed on the selling price with IGST.
- Anil will pay the selling price of Rs. 46,262 to the seller.
Cost of Goods
- The goods were sold to Anil at a profit of Rs. 225 on cost.
- The cost of the goods sold is Rs. 40,000.
Trade Discount
- A trade discount of Rs. 220 was given on the cost of the goods.
- Trade discounts are offered to customers to encourage bulk purchases or for other reasons such as building customer loyalty.
IGST
- Integrated Goods and Services Tax (IGST) is applicable on the sale of goods.
- The IGST rate is 18%.
- IGST is a tax levied on goods and services that are sold and supplied from one state to another.
Cash Discount
- A cash discount of 2% is allowed on the selling price of the goods.
- Cash discounts are given to customers as an incentive for prompt payment.
Calculation of the Selling Price
1. Selling Price = Cost Price + Profit
- Selling Price = Rs. 40,000 + Rs. 225 = Rs. 40,225
2. Selling Price after Trade Discount = Selling Price - Trade Discount
- Selling Price after Trade Discount = Rs. 40,225 - Rs. 220 = Rs. 40,005
3. IGST = Selling Price after Trade Discount * IGST Rate
- IGST = Rs. 40,005 * 18% = Rs. 7,200.90 (rounded to Rs. 7,201)
4. Selling Price with IGST = Selling Price after Trade Discount + IGST
- Selling Price with IGST = Rs. 40,005 + Rs. 7,201 = Rs. 47,206
5. Cash Discount = Selling Price with IGST * Cash Discount Rate
- Cash Discount = Rs. 47,206 * 2% = Rs. 944.12 (rounded to Rs. 944)
6. Final Selling Price = Selling Price with IGST - Cash Discount
- Final Selling Price = Rs. 47,206 - Rs. 944 = Rs. 46,262
Summary
- The goods were sold to Anil for a total selling price of Rs. 46,262.
- The cost of the goods was Rs. 40,000.
- A trade discount of Rs. 220 was given on the cost.
- IGST at a rate of 18% was applied to the selling price after the trade discount.
- A cash discount of 2% was allowed on the selling price with IGST.
- Anil will pay the selling price of Rs. 46,262 to the seller.
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Sold goods costing rs40000 to anil a current dated cheque at a profit of 225 on cost less 220trade discount IGST @18%.cash discount is allowed @ 2%?
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Sold goods costing rs40000 to anil a current dated cheque at a profit of 225 on cost less 220trade discount IGST @18%.cash discount is allowed @ 2%? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Sold goods costing rs40000 to anil a current dated cheque at a profit of 225 on cost less 220trade discount IGST @18%.cash discount is allowed @ 2%? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Sold goods costing rs40000 to anil a current dated cheque at a profit of 225 on cost less 220trade discount IGST @18%.cash discount is allowed @ 2%?.
Sold goods costing rs40000 to anil a current dated cheque at a profit of 225 on cost less 220trade discount IGST @18%.cash discount is allowed @ 2%? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Sold goods costing rs40000 to anil a current dated cheque at a profit of 225 on cost less 220trade discount IGST @18%.cash discount is allowed @ 2%? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Sold goods costing rs40000 to anil a current dated cheque at a profit of 225 on cost less 220trade discount IGST @18%.cash discount is allowed @ 2%?.
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