Question 40 of 45intermediate🔧 ApplyNumerical6 marks

Enter the following transactions in the Purchase Journal (Book) of M/s Gupta Traders of July 2017: 01 Bought from Rahul Traders as per invoice no.20041: 40 Registers @ ₹60 each, 80 Gel Pens @ ₹15 each, 50 note books @ ₹20 each, Trade discount 10%. 15 Bought from Global Stationers as per invoice no.1132: 40 Ink Pads @ ₹8 each, 50 Files @ ₹10 each, 20 Color Books @ ₹20 each, Trade Discount 5% 23 Purchased from Lamba Furniture as per invoice no. 3201: 2 Chairs @ 600 per chair, 1 Table @ 1000 per table 25 Bought from Mumbai Traders as per invoice no.1111: 10 Paper Rim @ ₹100 per rim, 400 drawing Sheets @ ₹3 each, 20 Packets waters colour @ ₹40 per packet

Correct Answer

Purchases (Journal) Book of M/s Gupta Traders

DateInvoice No.Name of Supplier (Account to be credited)L.F.Details (₹)Amount (₹)
2017
July 0120041Rahul Traders40 Registers @ ₹60 = 2,400
80 Gel Pens @ ₹15 = 1,200
50 Note books @ ₹20 = 1,000
Total: 4,600
Less: Trade Discount 10% (460)4,140
July 151132Global Stationers40 Ink Pads @ ₹8 = 320
50 Files @ ₹10 = 500
20 Color Books @ ₹20 = 400
Total: 1,220
Less: Trade Discount 5% (61)1,159
July 251111Mumbai Traders10 Paper Rim @ ₹100 = 1,000
400 Drawing Sheets @ ₹3 = 1,200
20 Packets Water Colour @ ₹40 = 8003,000
Total8,299

(Note: The transaction on July 23 regarding Lamba Furniture is not recorded in the Purchases Book as it relates to the purchase of a fixed asset, not goods for resale.)

Exercise: Numerical Questions | Q: 13
For More Understanding

Explanation

The Purchases Book records only credit purchases of goods meant for resale (trade).

  1. July 01 & July 15: These transactions involve stationery items purchased on credit from Rahul Traders and Global Stationers. Trade discounts are deducted from the list price before recording the net amount.
  2. July 23: The purchase of furniture from Lamba Furniture is the purchase of a fixed asset, not trading stock. Therefore, it is recorded in the Journal Proper (or Assets Register), not the Purchases Book.
  3. July 25: Goods purchased from Mumbai Traders are recorded at the invoice value. The calculated total matches the textbook answer of ₹8,299.

Solution Steps

  1. Step 1: Calculate the net amount for Rahul Traders. Total List Price = (40×6040 \times 60) + (80×1580 \times 15) + (50×2050 \times 20) = 2,400 + 1,200 + 1,000 = 4,600. Trade Discount = 10% of 4,600 = 460. Net Amount = 4,600 - 460 = 4,140.

  2. Step 2: Calculate the net amount for Global Stationers. Total List Price = (40×840 \times 8) + (50×1050 \times 10) + (20×2020 \times 20) = 320 + 500 + 400 = 1,220. Trade Discount = 5% of 1,220 = 61. Net Amount = 1,220 - 61 = 1,159.

  3. Step 3: Analyze Lamba Furniture. Purchase of chairs and tables is an asset purchase, not a trade purchase. Exclude from Purchases Book.

  4. Step 4: Calculate the amount for Mumbai Traders. Total Amount = (10×10010 \times 100) + (400×3400 \times 3) + (20×4020 \times 40) = 1,000 + 1,200 + 800 = 3,000.

  5. Step 5: Compute the total for the Purchases Book: 4,140 + 1,159 + 3,000 = 8,299.

PreviousNext