Question

Record the following transactions in a journal.
(i) Received cash from Jaya for a bad debt written - Off last year Rs. 400.
(ii) Bought goods at the list price of Rs. 1,00,000 From Rani less 20% trade discount and 2% cash discount and paid 40% by cheque.
(iii) Sold goods ot Preeti at the list price of Rs. 2,00,000 less 20% trade discount and 2% cash discount and paid 50% by cheque.
(iv) Sold goods to Tanu for Rs.40,000, allowing her a trade discount of 5% and a cash discount of 10% she paid $\frac{1}{4}th$ of the amount in cash at the time of purchase.

Answer 1

Journal

$$\begin{array}{ccccc}\text{Date}& \text{Particular}& \text{LF}& \text{Amt. (Dr)}& \text{Amt.(Cr)}\\ \left(i\right)& \text{Cash A/c}\text{Dr}& & 400& \\ & \text{To Bad Debts Recovered A/c}& & & 400\\ & \text{(Being the bad debts writen - off last year, now recovered)}& & & \\ & \underset{–}{}& & & \\ \left(ii\right)& \text{Purchases A/c}\text{Dr}& & 80,000& \\ & \text{To Rani}& & & 80,000\\ & \text{(Being the goods purchased from Rani at trade discount of 20\%)}& & & \\ & \underset{–}{}& & & \\ & \text{Rani}\text{Dr}& & 32,000& \\ & \text{To Bank A/c}& & & 31,360\\ & \text{To Discount Received A/c (W.N.1)}& & & 640\\ & \text{(Being the 40\% payment made to Rani under a cash discount of 2\%)}& & & \\ & \text{In place of th etwo entries, one single entry can also be passed.}& & & \\ & \text{Purchases A/c}\text{Dr}& & 80,000& \\ & \text{To Bank A/c}& & & 31,360\\ & \text{To Discount Received A/c}& & & 640\\ & \text{To Rani}& & & 48,000\\ \left(iii\right)& \text{Preeti}\text{Dr}& & 1,60,000& \\ & \text{To Sales A/c}& & & 1,60,000\\ & \text{(Being the goods sold to Preeti at a trade discount of 20\%)}& & & \\ & \underset{–}{}& & & \\ & \text{Bank A/c}\text{Dr}& & 78,400& \\ & \text{Discount Allowed A/c}\text{Dr}& & 1,600& \\ & \text{To Preeti (W.N.2)}& & & 80,000\\ & \text{(Being the 50\% payment made by Preeti under a cash discount of 20\%)}& & & \\ & \text{In place of two entries, one single entry can also be passed}& & & \\ & \text{Bank A/c}\text{Dr}& & 78,400& \\ & \text{Discount Allowed A/c}\text{Dr}& & 1,600& \\ & \text{Preeti}\text{Dr}& & 80,000& \\ & \text{To Sales A/c}& & & 1,60,000\\ iv& \text{Tanu}\text{Dr}& & 28,500& \\ & \text{Cash A/c}\text{Dr}& & 8,550& \\ & \text{Discount Allowed A/c}\text{Dr}& & 950& \\ & \text{To Sales A/c(W.N.3)}& & & 38,000\\ & \text{Being the goods sold to tanu at terms of 5 trade}& & & \\ & \underset{–}{}& & \underset{–}{}& \underset{–}{}\\ & \text{Total}& & 3,90,400& 3,90,400\\ & & & \underset{–}{}& \underset{–}{}\end{array}$$
Working Note 1
$$\begin{array}{cc}\text{Gross value of purchases}& 1,00,000\\ \text{(-)Trade discount @ 20\%}& 20,000\\ & \overline{80,000}\\ \text{Cash Payment}=80,000\times 40\%& \overline{32,000}\\ \text{(-) Discount received}=32,000\times 2\%& \underset{–}{640}\\ \text{cash Received}& \underset{–}{31,360}\\ \text{Balance amount payabel to rani}=80,000-32,000& 48,000\end{array}$$
Working Note 2
$$\begin{array}{cc}\text{Gross value of Sales}& 2,00,000\\ \text{(-)discountReceived}=80,000\times 40\%& 40,000\\ & \overline{1,60,000}\\ \text{Cash to be received}=1,60,000\times 50\%& \overline{80,000}\\ \text{(-) Discount Given}=80,000\times 2\%& \underset{–}{1,600}\\ \text{cash Received}& \underset{–}{78,400}\\ \text{Balance amount Received from Preeti}=1,60,000-80,000& 80,000\end{array}$$
Working Note 3
$$\begin{array}{cc}\text{Gross value of Sales}& 40,000\\ \text{(-)Trade discount @ 5\%}& 2,000\\ & \overline{38,000}\\ \text{Cash transaction amount}=38,000\times \frac{1}{4}& \overline{9,500}\\ \text{Credit transaction amount}=38,000\times \frac{3}{4}& \underset{–}{28,500}\\ \text{cash discounted allowed}9,500\times 10\%& \underset{–}{950}\\ \text{cash received from cash transaction}=9,500-950& 8,550\end{array}$$