A LTD
Purchase 70000
(700 KG*100)  
 +   VAT 5% 3500
  73500

Suppose Company paid 65000 in full settlement

Pass entry for Purchase ,payment and Discount received

Will we issue Debit Note or Credit Note??

-a-

ENTRY FOR Purchase

PUR 5% LOCAL DR 70000
INPUT VAT 5% DR 3500
                       TO A LTD 73500

ENTRY FOR PAYMENT
A LTD DR 65000
              TO BANK 65000

Discount Received=73500-65000=8500

This Discount is including Vat of 5%

DISCOUNT COMPUTATION
DISCOUNT 8095.2 (8500*100/105)
+ VAT 5%    404.8
TOTAL        8500.0

ENTRY
A LTD DR 8500
             To Discount Received 8095.2
             To Input Vat 5% 404.8
-ea-

Summary

Difference Between Last Question AND This Question

In Last Question,vat is extra and in This Question vat is inclusive

Particulars Last Question This Question
DISCOUNT 8500 8095.2
 +  VAT 5% 425 404.8
TOTAL 8925 8500.0
  1. Tax Practical
  2. Practical VAT CST
Ask Download

About the Author

CA Maninder Singh's photo - Expert in Practical Accounts, Taxation and Efiling
CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 6 years. He provides courses for Practical Accounts, Taxation and Efiling at teachoo.com .
Jail