Commerce Exam > Commerce Questions > Sold goods costing rs40000 to anil a current ...
Start Learning for Free
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%?
Verified Answer
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.
Attention Commerce Students!
To make sure you are not studying endlessly, EduRev has designed Commerce study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in Commerce.
|
|
Explore Courses for Commerce exam
|
|
Similar Commerce Doubts
Top Courses for CommerceView all
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%?
Question Description
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%?.
Solutions 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%? in English & in Hindi are available as part of our courses for Commerce.
Download more important topics, notes, lectures and mock test series for Commerce Exam by signing up for free.
Here you can find the meaning of 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%? defined & explained in the simplest way possible. Besides giving the explanation of
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%?, a detailed solution 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%? has been provided alongside types of 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%? theory, EduRev gives you an
ample number of questions to practice 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%? tests, examples and also practice Commerce tests.
|
|
Explore Courses for Commerce exam
|
|
Suggested Free Tests
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
Follow Us
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup