Journal Entries with Trade Discounts
Question 1: Transactions for M/s Gupta Traders
1. Purchased goods worth INR 40,000 from M/s Sharma Traders at a 10% trade discount.
2. Sold goods worth INR 30,000 to M/s Verma & Sons at a 10% trade discount.
3. Paid INR 5,000 for office rent in cash.
4. Purchased stationery worth INR 1,000 in cash.
5. Returned defective goods worth INR 3,000 to M/s Sharma Traders.
6. Sold goods worth INR 20,000 to M/s Rao Enterprises at a 5% trade discount.
7. Paid INR 15,000 to M/s Sharma Traders in partial settlement.
8. Received INR 10,000 from M/s Verma & Sons.
9. Purchased goods worth INR 25,000 at a 15% trade discount.
10. Sold goods worth INR 15,000 to M/s Jain Enterprises at a 5% trade discount.
11. Paid INR 2,000 for electricity in cash.
12. Purchased furniture worth INR 12,000 for office use, paid in cash.
13. Received INR 5,000 from M/s Rao Enterprises.
14. Paid INR 6,000 for advertisement expenses in cash.
15. Purchased goods worth INR 50,000 at a 20% trade discount from M/s Singh Traders.
16. Sold goods worth INR 18,000 to M/s Gupta Industries at a 10% trade discount.
17. Paid INR 4,000 for transportation in cash.
18. Received INR 8,000 from M/s Jain Enterprises.
19. Goods worth INR 3,000 were lost in transit.
20. Distributed goods worth INR 2,000 as free samples.
Answers for Question 1
Purchases A/c Dr. INR 36,000 To M/s Sharma Traders A/c INR 36,000 (10% trade disc
M/s Verma & Sons A/c Dr. INR 27,000 To Sales A/c INR 27,000 (10% trade discount)
Rent A/c Dr. INR 5,000 To Cash A/c INR 5,000
Stationery A/c Dr. INR 1,000 To Cash A/c INR 1,000
M/s Sharma Traders A/c Dr. INR 3,000 To Purchases Return A/c INR 3,000
M/s Rao Enterprises A/c Dr. INR 19,000 To Sales A/c INR 19,000 (5% trade discount)
M/s Sharma Traders A/c Dr. INR 15,000 To Cash A/c INR 15,000
Cash A/c Dr. INR 10,000 To M/s Verma & Sons A/c INR 10,000
Purchases A/c Dr. INR 21,250 To Supplier A/c INR 21,250 (15% trade discount)
M/s Jain Enterprises A/c Dr. INR 14,250 To Sales A/c INR 14,250 (5% trade discount)
Electricity A/c Dr. INR 2,000 To Cash A/c INR 2,000
Furniture A/c Dr. INR 12,000 To Cash A/c INR 12,000
Cash A/c Dr. INR 5,000 To M/s Rao Enterprises A/c INR 5,000
Advertisement A/c Dr. INR 6,000 To Cash A/c INR 6,000
Purchases A/c Dr. INR 40,000 To M/s Singh Traders A/c INR 40,000 (20% trade discou
M/s Gupta Industries A/c Dr. INR 16,200 To Sales A/c INR 16,200 (10% trade discount
Transportation A/c Dr. INR 4,000 To Cash A/c INR 4,000
Cash A/c Dr. INR 8,000 To M/s Jain Enterprises A/c INR 8,000
Loss by Theft A/c Dr. INR 3,000 To Goods A/c INR 3,000
Advertisement A/c Dr. INR 2,000 To Purchases A/c INR 2,000
