Journalize the following transactions: Jan 5th: Purchased a computer for office use from Computer Mart, Haryana for Rs. 50,000 plus IGST @ 12%, paid Rs. 25,000 by cheque, and the... Journalize the following transactions: Jan 5th: Purchased a computer for office use from Computer Mart, Haryana for Rs. 50,000 plus IGST @ 12%, paid Rs. 25,000 by cheque, and the balance is to be paid after one month. Jan 12th: Goods purchased paying IGST @ 12% costing Rs. 20,000 were destroyed by fire. These goods were insured, and the Insurance Company admitted a claim for Rs. 15,000. Jan 22nd: Vinay, an employee of the firm, had taken a travelling advance of Rs. 5,000. He submitted a bill for Rs. 5,500. After adjusting the advance, the balance amount was paid to him. Jan 28th: X sells goods to Y for Rs. 80,000 plus CGST and SGST @ 6% each. A cash discount of 2% is allowed, and a trade discount of 10% is given. Half of the amount was received by cheque within the specified time.
Understand the Problem
The question requires preparing journal entries for the given business transactions. This involves identifying the accounts affected, determining whether they are debited or credited, and calculating the amounts based on the information provided, including GST, discounts, and payment terms.
Answer
The journal entries for the specified transactions are provided above, detailing debits and credits for each event.
Here are the journal entries for the transactions:
Jan 5th: Computer A/c Dr. 50,000 IGST Input A/c Dr. 6,000 To Bank A/c 25,000 To Creditor A/c 31,000 (Being computer purchased with part payment)
Jan 12th: Loss by Fire A/c Dr. 20,000 To Goods A/c 20,000 (Being goods destroyed by fire)
Insurance Claim A/c Dr. 15,000 To Loss by Fire A/c 15,000 (Being claim admitted by Insurance Company)
Jan 22nd: Travelling Expenses A/c Dr. 5,500 To Vinay 5,000 To Cash A/c 500 (Being traveling expenses and balance paid)
Jan 28th: Debtors A/c Dr. 84,672 To Sales A/c 72,000 To CGST Output A/c 4,320 To SGST Output A/c 4,320 To Discount A/c 4,032 (Being goods sold with cash and trade discount)
Answer for screen readers
Here are the journal entries for the transactions:
Jan 5th: Computer A/c Dr. 50,000 IGST Input A/c Dr. 6,000 To Bank A/c 25,000 To Creditor A/c 31,000 (Being computer purchased with part payment)
Jan 12th: Loss by Fire A/c Dr. 20,000 To Goods A/c 20,000 (Being goods destroyed by fire)
Insurance Claim A/c Dr. 15,000 To Loss by Fire A/c 15,000 (Being claim admitted by Insurance Company)
Jan 22nd: Travelling Expenses A/c Dr. 5,500 To Vinay 5,000 To Cash A/c 500 (Being traveling expenses and balance paid)
Jan 28th: Debtors A/c Dr. 84,672 To Sales A/c 72,000 To CGST Output A/c 4,320 To SGST Output A/c 4,320 To Discount A/c 4,032 (Being goods sold with cash and trade discount)
More Information
Journal entries follow the double-entry bookkeeping system, where every transaction affects at least two accounts. The fundamental accounting equation (Assets = Liabilities + Equity) is always maintained.
Tips
A common mistake is forgetting to include GST or calculating discounts incorrectly. Remember to apply trade discounts before cash discounts.
Sources
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