Purchased goods from azad ltd for 30000 plus VAT @10% give journal entry?

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Answer

Purchase a/c.             DrVAT paid a/c.                Dr          To ajad ltd

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Purchase a/c....Dr.    30000vat paid a/c .....Dr.       3000    to Azal a/c ...Dr.               33000

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Purchase a/c....dr    to Azad Ltd

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Purchases account.....Dr   30000Vat paid      .....Dr                 3000         To cash account                  33000

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Purchase a/c.....dr  to Azad Ltd a/c

Answer

Journal Entry for Purchasing Goods from Azad Ltd

To record the purchase of goods from Azad Ltd for 30,000 plus VAT at 10%, we need to make the following journal entry:

1. Debit the Purchases Account:
The Purchases account represents the cost of goods acquired for resale. We will debit the Purchases account with the net amount, excluding VAT. In this case, the Purchases account will be debited with 30,000.

2. Debit the VAT Input Account:
The VAT Input account is used to record the VAT charged on purchases. We will debit the VAT Input account with the amount of VAT payable. In this case, the VAT Input account will be debited with 3,000.

3. Credit the Accounts Payable Account:
The Accounts Payable account represents the amount owed to Azad Ltd for the purchase. We will credit the Accounts Payable account with the total amount, including VAT. In this case, the Accounts Payable account will be credited with 33,000.

The journal entry can be summarized as follows:

Debit:
- Purchases Account: 30,000
- VAT Input Account: 3,000

Credit:
- Accounts Payable Account: 33,000

Explanation:

- The Purchases Account is debited with the net amount of the goods purchased, which is 30,000. This reflects the cost of the goods acquired for resale.
- The VAT Input Account is debited with the VAT amount of 3,000. This represents the VAT charged on the purchase and will be claimed as input tax credit.
- The Accounts Payable Account is credited with the total amount of 33,000, which includes the cost of goods and the VAT charged. This reflects the liability to pay Azad Ltd for the purchase.

Summary:

The journal entry records the purchase of goods from Azad Ltd for 30,000 plus VAT at 10%. The Purchases Account is debited with the net amount, the VAT Input Account is debited with the VAT amount, and the Accounts Payable Account is credited with the total amount. This ensures proper accounting for the purchase and the VAT liability.

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