alise the following transactions in the books of Mohan Singh

alise the following transactions in the books of Mohan Singh, Delhi: t a Rai of Alwar, Rajasthan who owed Mohan Singh 25,000 became insolvent and Journ received 60 paise in a rupee as full and final settlement. i)Mohan Singh owes to his landlord 10,000 as rent. Charge depreciation of 10% on furniture costing 50,000. i at (? () Salaries due to employees 20,000. ) Sold to Sunil goods in cash of 10,000 less 10% trade discount plus CGST and SGST @ 6% each and received a net of?8,500. (1) Provided interest on capital of?1,00.000 @ 10% per annum. (vii) Goods lost in theft_-7 5,000, which were purchased paying IGST @ 12% from Alwar, Rajasthan Hint: (vi) Loss of Stock by Theft A/c ..Dr 5,600 To Purchases A/c To Input IGST A/c 5,000 ?600]

Solution

Books of Mohan Singh, Delhi

Journal

Explanation:

(i) Cash received from Raj = 25,000 x 60%

= ?15,000

(v) List price of goods sold = ?10,000

Less: Trade discount = 10% i.e. 10,000 x 10% = ?1,000

Sale price = 10,000 - 1,000

= ?9,000

CGST = 9,000 x 6%

= ?540

SGST = 9,000 x 6%

= ?540

Total amount receivable = 9,000 + 540 + 540

= ?10,080

Net amount received = ?8,500

Hence, cash discount allowed = 10,080 - 8,500

= ?1,580

(vii) When goods are lost, input GST paid on purchase cannot be set off against output GST on sale since such goods are not available for sale. Hence, input IGST paid on purchase is reversed at the time of loss of goods

Date	Particulars	L.F.	Debit (?)	Credit (?)
(i)	Cash A/c Dr.		15,000
	Bad debts A/c Dr.		10,000
	To Raj			25,000
(ii)	Rent A/c Dr.		10,000
	To Rent Outstanding A/c			10,000
(iii)	Depreciation A/c Dr.		5,000
	To Furniture A/c			5,000
(iv)	Salaries A/c Dr.		20,000
	To Salaries outstanding A/c			20,000
(v)	Cash A/c Dr.		8,500
	Discount allowed A/c Dr.		1,580
	To Sales A/c			9,000
	To Output CGST A/c			540
	To Output SGST A/c			540
(vi)	Interest on capital A/c Dr.		10,000
	To Capital A/c			10,000
(vii)	Loss of stock by theft A/c Dr.		5,600
	To Purchase A/c			5,000
	To Input IGST A/c			600