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Pass the journal entrues in respect of the following transactions jan 1 purchased goods from suresh for cash at a list price of 20000 at trade discount of 20%?
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Pass the journal entrues in respect of the following transactions jan ...
Pass the journal entrues in respect of the following transactions jan 1 purchased goods from suresh for cash at a list price of 20000 at trade discount of 20%
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Pass the journal entrues in respect of the following transactions jan ...
Purchase of Goods from Suresh
Journal Entries:
Date: January 1st
1. Purchase Account Debit - 16,000
Trade Discount Account Credit - 4,000
Cash Account Credit - 12,000
Explanation:
1. Purchase of Goods:
On January 1st, the business purchased goods from Suresh for cash. The list price of the goods was $20,000, but a trade discount of 20% was given. The trade discount is a reduction in the list price offered by the seller to the buyer as an incentive to make the purchase. The trade discount is not recorded separately in the books of the buyer. Instead, it is deducted from the list price to arrive at the net amount payable.
Calculation:
List price of goods = $20,000
Trade discount = 20%
Trade discount amount = $20,000 x 20% = $4,000
Net amount payable = $20,000 - $4,000 = $16,000
Journal Entry Explanation:
- The Purchase Account is debited with the net amount payable, which is $16,000. This account is used to record the cost of goods purchased for resale.
- The Trade Discount Account is credited with the trade discount amount of $4,000. This account is used to record the discounts received from suppliers.
- The Cash Account is credited with the cash paid, which is $12,000. This account is used to record any cash payments made by the business.
Summary:
The journal entries for the purchase of goods from Suresh on January 1st are as follows:
- Purchase Account Debit - $16,000
- Trade Discount Account Credit - $4,000
- Cash Account Credit - $12,000
Journal Entries:
Date: January 1st
1. Purchase Account Debit - 16,000
Trade Discount Account Credit - 4,000
Cash Account Credit - 12,000
Explanation:
1. Purchase of Goods:
On January 1st, the business purchased goods from Suresh for cash. The list price of the goods was $20,000, but a trade discount of 20% was given. The trade discount is a reduction in the list price offered by the seller to the buyer as an incentive to make the purchase. The trade discount is not recorded separately in the books of the buyer. Instead, it is deducted from the list price to arrive at the net amount payable.
Calculation:
List price of goods = $20,000
Trade discount = 20%
Trade discount amount = $20,000 x 20% = $4,000
Net amount payable = $20,000 - $4,000 = $16,000
Journal Entry Explanation:
- The Purchase Account is debited with the net amount payable, which is $16,000. This account is used to record the cost of goods purchased for resale.
- The Trade Discount Account is credited with the trade discount amount of $4,000. This account is used to record the discounts received from suppliers.
- The Cash Account is credited with the cash paid, which is $12,000. This account is used to record any cash payments made by the business.
Summary:
The journal entries for the purchase of goods from Suresh on January 1st are as follows:
- Purchase Account Debit - $16,000
- Trade Discount Account Credit - $4,000
- Cash Account Credit - $12,000
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Pass the journal entrues in respect of the following transactions jan 1 purchased goods from suresh for cash at a list price of 20000 at trade discount of 20%?
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Pass the journal entrues in respect of the following transactions jan 1 purchased goods from suresh for cash at a list price of 20000 at trade discount of 20%? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about Pass the journal entrues in respect of the following transactions jan 1 purchased goods from suresh for cash at a list price of 20000 at trade discount of 20%? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Pass the journal entrues in respect of the following transactions jan 1 purchased goods from suresh for cash at a list price of 20000 at trade discount of 20%?.
Pass the journal entrues in respect of the following transactions jan 1 purchased goods from suresh for cash at a list price of 20000 at trade discount of 20%? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about Pass the journal entrues in respect of the following transactions jan 1 purchased goods from suresh for cash at a list price of 20000 at trade discount of 20%? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Pass the journal entrues in respect of the following transactions jan 1 purchased goods from suresh for cash at a list price of 20000 at trade discount of 20%?.
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