Journalize the following transactions: Jan 5th Purchased Computer for office use from computer mart, Haryana for Rs. 50,000 plus IGST @ 12%, paid Rs. 25,000 by cheque and balance t... Journalize the following transactions: Jan 5th Purchased Computer for office use from computer mart, Haryana for Rs. 50,000 plus IGST @ 12%, paid Rs. 25,000 by cheque and balance 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 Insurance Company admitted a claim for Rs. 15,000. Jan 22nd Vinay, an employee of the firm had taken travelling advance of Rs. 5,000. He submitted a bill for Rs. 5,500. After adjusting the advance, balance amount was paid to him. Jan 28th X sells goods to Y for Rs. 80,000 plus CGST and SGST @6% each. Cash discount to be allowed @2% , and trade discount @10%. Half of the amount received by cheque within specified time.
Understand the Problem
The task is to journalize the given transactions, which involves recording each transaction in the general journal with proper debits and credits. This includes accounting for GST, discounts, insurance claims, and employee advances. Each date represents a separate transaction that needs to be recorded with appropriate accounts and amounts.
Answer
The journal entries include purchases, losses, employee transactions, and sales with discounts and GST.
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 Sundry Creditors 31,000
- Jan 12th: Loss by Fire A/c Dr. 20,000, To Purchase A/c 20,000; Insurance Claim A/c Dr. 15,000, To Loss by Fire 15,000
- Jan 22nd: Travelling Expenses A/c Dr. 5,500, To Vinay 5,000, To Cash A/c 500
- Jan 28th: Bank A/c Dr. 35,280, Cash Discount A/c Dr. 720, To Sales A/c 72,000, To CGST Output A/c 4,320, To SGST Output A/c 4,320
Note: The Jan 28th transaction is calculated as follows: List Price: 80,000 Trade Discount (10%): 8,000 Sales Value: 72,000 CGST (6%): 4,320 SGST (6%): 4,320 Total Sales with GST: 80,640 Cash Discountable Amount: 72,000/2 = 36,000 Cash Discount (2%): 720 Amount Received by Cheque: 36,000 - 720 = 35,280
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 Sundry Creditors 31,000
- Jan 12th: Loss by Fire A/c Dr. 20,000, To Purchase A/c 20,000; Insurance Claim A/c Dr. 15,000, To Loss by Fire 15,000
- Jan 22nd: Travelling Expenses A/c Dr. 5,500, To Vinay 5,000, To Cash A/c 500
- Jan 28th: Bank A/c Dr. 35,280, Cash Discount A/c Dr. 720, To Sales A/c 72,000, To CGST Output A/c 4,320, To SGST Output A/c 4,320
Note: The Jan 28th transaction is calculated as follows: List Price: 80,000 Trade Discount (10%): 8,000 Sales Value: 72,000 CGST (6%): 4,320 SGST (6%): 4,320 Total Sales with GST: 80,640 Cash Discountable Amount: 72,000/2 = 36,000 Cash Discount (2%): 720 Amount Received by Cheque: 36,000 - 720 = 35,280
More Information
Journal entries are used to record the financial transactions of a business in chronological order. Each entry usually includes a debit and a credit to ensure the accounting equation (Assets = Liabilities + Equity) remains balanced.
Tips
A common mistake is not understanding the difference between trade and cash discounts. Trade discounts reduce the price before GST, while cash discounts are applied after calculating the amount due.
Sources
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