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Pass journal entry for the following transaction
goods given away charity rs 500. These goods were purchased on paying cgst and sgst @ 6% each?
goods given away charity rs 500. These goods were purchased on paying cgst and sgst @ 6% each?
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Pass journal entry for the following transaction goods given away char...
Journal Entry for Goods Given Away as Charity
When goods worth Rs. 500 are donated to charity, it is important to account for both the value of the goods and the taxes that were paid during their purchase. This transaction involves the removal of inventory and the recognition of a charitable contribution.
Transaction Details
- Goods Given Away: Rs. 500
- CGST Rate: 6%
- SGST Rate: 6%
Calculation of Tax Paid
- Total Tax Rate: 6% + 6% = 12%
- Total Tax on Goods:
- Tax Amount = Rs. 500 * 12% = Rs. 60
Journal Entry
The journal entry for this transaction will include the following accounts:
1. Charity Expense Account (Dr)
- Rs. 500 (Value of Goods)
2. CGST Payable Account (Dr)
- Rs. 30 (Half of Total Tax)
3. SGST Payable Account (Dr)
- Rs. 30 (Half of Total Tax)
4. Inventory Account (Cr)
- Rs. 500 (Value of Goods)
5. GST Input Credit Account (Cr)
- Rs. 60 (Total Tax)
Final Journal Entry Representation
- Debit: Charity Expense A/c Rs. 500
- Debit: CGST Payable A/c Rs. 30
- Debit: SGST Payable A/c Rs. 30
- Credit: Inventory A/c Rs. 500
- Credit: GST Input Credit A/c Rs. 60
Conclusion
This journal entry reflects the donation made as well as accounts for the tax implications. It ensures that both the value of the goods and the tax credits are properly recorded in the financial statements.
When goods worth Rs. 500 are donated to charity, it is important to account for both the value of the goods and the taxes that were paid during their purchase. This transaction involves the removal of inventory and the recognition of a charitable contribution.
Transaction Details
- Goods Given Away: Rs. 500
- CGST Rate: 6%
- SGST Rate: 6%
Calculation of Tax Paid
- Total Tax Rate: 6% + 6% = 12%
- Total Tax on Goods:
- Tax Amount = Rs. 500 * 12% = Rs. 60
Journal Entry
The journal entry for this transaction will include the following accounts:
1. Charity Expense Account (Dr)
- Rs. 500 (Value of Goods)
2. CGST Payable Account (Dr)
- Rs. 30 (Half of Total Tax)
3. SGST Payable Account (Dr)
- Rs. 30 (Half of Total Tax)
4. Inventory Account (Cr)
- Rs. 500 (Value of Goods)
5. GST Input Credit Account (Cr)
- Rs. 60 (Total Tax)
Final Journal Entry Representation
- Debit: Charity Expense A/c Rs. 500
- Debit: CGST Payable A/c Rs. 30
- Debit: SGST Payable A/c Rs. 30
- Credit: Inventory A/c Rs. 500
- Credit: GST Input Credit A/c Rs. 60
Conclusion
This journal entry reflects the donation made as well as accounts for the tax implications. It ensures that both the value of the goods and the tax credits are properly recorded in the financial statements.
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Pass journal entry for the following transaction goods given away charity rs 500. These goods were purchased on paying cgst and sgst @ 6% each?
Question Description
Pass journal entry for the following transaction goods given away charity rs 500. These goods were purchased on paying cgst and sgst @ 6% each? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Pass journal entry for the following transaction goods given away charity rs 500. These goods were purchased on paying cgst and sgst @ 6% each? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Pass journal entry for the following transaction goods given away charity rs 500. These goods were purchased on paying cgst and sgst @ 6% each?.
Pass journal entry for the following transaction goods given away charity rs 500. These goods were purchased on paying cgst and sgst @ 6% each? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Pass journal entry for the following transaction goods given away charity rs 500. These goods were purchased on paying cgst and sgst @ 6% each? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Pass journal entry for the following transaction goods given away charity rs 500. These goods were purchased on paying cgst and sgst @ 6% each?.
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