DK Goel Solutions Chapter 10 Accounting for Goods and Service Tax (GST)

DK Goel Solutions 

Chapter 10 

Accounting for Goods and Service Tax (GST)

DK Goel Accountancy Class 11 Solutions Chapter 10 Accounting for Goods and Service Tax (GST) which are outlined by expert Accountancy teachers from the latest version of DK Goel Class 11 Accountancy books. 

Short Answer Question

Question 1

What is GST?

Answer: Goods and services tax (GST) is a tax imposed indirectly on the goods and services supply.

Question 2

Name the two central taxes that have merged into GST.

Answer: The two central taxes that have merged into GST are excise duty and customs duty.

Question 3

Name the two-state taxes that have merged into GST.

Answer: The two-state taxes that have merged into GST are purchase tax and VAT.

Question 4

Give two advantages of GST.

Answer: The two advantages of GST are a) decreases the cost of goods and b) reduces tax invasion.

Question 5

What is the full form of CGST?

Answer: The full form of CGST is Central Goods and Services Tax.

Question 6

What is the full form of SGST?

Answer: The full form of SGST is State Goods and Services Tax.

Question 7

What is the full form of IGST?

Answer: The full form of IGST is Integrated Goods and Services Tax.

Question 8

What is CGST?

Answer: CGST is a tax imposed on supplies of goods and services within the state-imposed by the central government and administered by the CGST Act.

Question 9

What is IGST?

Answer: IGST is a tax imposed on all Inter-state supplies of both import and export of goods and services and is supervised by the IGST Act.

Practical Question

Question 1

Pass entries in the books of Mukerjee & Sons. assuming all transactions have taken place within the state of Uttar Pradesh. Assume CGST @9% and SGST @ 9%.

2018	Particulars
March 01 04 15 18 25 31	Bought goods for ₹ 5,00,000 from Mehta Bros. Goods sold for ₹ 8,00,000 to Munjal & Co. Paid for advertisement ₹ 40,000 by cheque. Bought furniture for office use ₹ 50,000 and payment made by cheque. Paid for printing and stationery ₹ 8,000. Payment of the balance amount of GST.

Solution:

Date 2018	Particulars	L.F	Debit (₹)	Credit (₹)
March 01	Purchases A/c Input CGST A/c Input SGST A/c	Dr. Dr. Dr.	5,00,000 45,000 45,000
	To Mehta Bros. A/c (Bought goods from Mehta bros.)	Dr.		5,90,000
04	Munjal & Co. A/c	.	9,44,000
	To Sales A/c To Output CGST A/c To Output SGST A/c (Goods sold to Munjal & Co.)			8,00,000 72,000 72,000
15	Advertisement A/c Input CGST A/c Input SGST A/	Dr. Dr. Dr.	40,000 3,600 3,600
	To Bank A/c (Advertisement payment)			47,200
18	Furniture A/c Input CGST A/c Input SGST A/c	Dr. Dr. Dr.	50,000 4,500 4,500
	To Bank A/c (Bought furniture for office)			59,000
25	Printing & Stationery A/c Input CGST A/c Input SGST A/c		8,000 720 720
	To Cash A/c Stationery and printing payment)			9,440
31	Output CGST A/c Output SGST A/c		53,820 53,820
	To Input CGST A/c To Input SGST A/c (Availed Input tax credit)			53,820 53,820
31	Output CGST A/c Output CGST A/c		18,180 18,180
	To Bank A/c (Payment of balance tax to government)			36,360
			17,93,640	17,93,640

Question 2

Pass entries in the books of Devdhar & Bros. Odisha, assuming all transactions have been entered within the state, charging CGST and SGST @ 9% each.

2018	Particulars
March 04 07 10 12 20 25 26 31	Purchased goods for ₹ 5,00,000 from Sunil Bros. Goods returned to Sunil Bros. for ₹ 20,000. Sold goods to Mehta & Co. for ₹ 8,00,000. Goods returned by Mehta & Co. for ₹ 30,000. Goods withdrawn by Proprietor for personal use ₹ 10,000. Goods distributed as free samples ₹ 5,000. Paid advertisement expenses by cheque ₹20,000. Payment made of balance amount.

Solution:

Date 2018	Particulars	L.F	Debit (₹)	Credit (₹)
March 04	Purchases A/c Input CGST A/c Input SGST A/c	Dr. Dr. Dr.	5,00,000 45,000 45,000
	To Sunil Bros. A/c (Bought from Sunil Bros.)			5,90,000
07	Sunil Bros. A/c	Dr.	23,600
	To Purchases Return A/c To Input CGST A/c To Input SGST A/c (Returned goods to Sunil Bros.)			20,000 1,800 1,800
10	Mehta& Co. A/c	Dr.	9,44,000
	To Sales A/c To Output CGST A/c To Output SGST A/c (Goods sold to Mehta& Co.)			8,00,000 72,000 72,000
12	Sales Return A/c Output CGST A/c Output SGST A/c	Dr. Dr. Dr.	30,000 2,700 2,700
	To Mehta & Co. A/c (Returned goods by Mehta & Co.)			35,400
20	Drawings A/c	Dr.	11,800
	To Purchases Return A/c To Input CGST A/c To Input SGST A/c (Withdrawn goods for personal use)			10,000 900 900
25	Free Samples A/c	Dr.	5,900
	To Purchases Return A/c To Input CGST A/c To Input SGST A/c (Distributed goods as free samples)			5,000 450 450
26	Advertisement A/c To Input CGST A/c To Input SGST A/c	Dr. Dr. Dr.	20,000 1,800 1,800
	To Bank A/c (Advertisement payment)			23,600
31	Output CGST A/c Output SGST A/c	Dr. Dr.	43,650 43,650
	To Input CGST A/c To Input SGST A/c (Availed Input tax credit)			43,650 43,650
31	Output CGST A/c Output SGST A/c	Dr. Dr.	25,650 25,650
	To Bank A/c (Payment of balance tax to government)			25,650
			17,72,900	17,72,900

Question 3

Record the following transactions in the books of Sahdev & Sons assuming all transactions have been entered within the state of Bihar, Charging CGST and SGST @ 9% each.

Particulars

Bought goods from Nanak Bros. for ₹ 4,00,000 at 10% trade discount and 3% cash discount on the purchase price. 25% of the amount paid at the time of purchase. Sold goods to Kumar & Sons. for ₹ 2,00,000 at 20% trade discount and 5% cash discount on sale price. 60% of the amount received by Cheque. Received from Gopi Chand ₹ 38,000 by Cheque after deducting 5% cash discount. Paid ₹ 20,000 for rent by Cheque. Paid ₹ 50,000 for salaries by Cheque. Goods worth ₹ 10,000 distributed as free samples. ₹ 5,000 due from Chanderkant are bad-debts. Sold household furniture for ₹ 15,000 and the proceeds were invested into business.

Solution:

Sl.no	Particulars	L.F	Debit (₹)	Credit (₹)
	Purchases A/c Input CGST A/c Input SGST A/c	Dr. Dr. Dr.	3,60,000 32,400 32,400
	To Cash A/c To Nanak Bros. A/c To Discount Received A/c (Goods purchased)			1,03,014 3,18,600 3,186
	Kumar & Sons A/c Bank A/c Discount Allowed A/c	Dr. Dr. Dr.	75,520 1,07,616 5,664
	To Sales A/c To Output CGST A/c To Output SGST A/c (Goods Sold)			1,60,000 14,400 14,400
	Bank A/c Discount Allowed A/c	Dr. Dr.	38,000 2,000
	To Gopi Chand A/c (Received full settlement from Gopi Chand)			40,000
	Rent A/c Input CGST A/c Input SGST A/c	Dr. Dr. Dr.	20,000 1,800 1,800
	To Bank A/c (Paid for rent)			23,600
	Salaries A/c	Dr.	50,000
	To Bank A/c (Paid salaries)			50,000
	Advertisement A/c	Dr.	11,800
	To Purchases A/c To Input CGST A/c To Input SGST A/c (Goods distributed as free samples)			10,000 900 900
	Bad Debts A/c	Dr.	5,000
	To Chanderkant A/c (Debtor proved bad)			5,000
	Cash A/c	Dr.	15,000
	To Capital A/c (Invested money into business)			15,000
			7,59,000	7,59,000

Question 4

Pass entries in the books of Mr. Roopani of Gujarat assuming CGST @ 9% and SGST@ 9%.

Particulars

Purchased goods for ₹ 2,00,000 from Suryakant of Jaipur (Rajasthan) on Credit. Sold goods for ₹ 1,50,000 to Mr. Pawar of Mumbai (Maharashtra) and the cheque received was sent to bank. Sold goods for ₹ 2,50,000 within the state on credit. Paid insurance premium of 20,000 by cheque. Purchased furniture for office for ₹ 60,000 by cheque. Payment made of balance amount of GST.

Solution:

Sl.no	Particulars	L.F	Debit (₹)	Credit (₹)
1	Purchases A/c Input IGST A/c	Dr. Dr.	2,00,000 36,000
	To Suryakant’s A/c (Goods purchased on credit)			2,36,000
2	Bank A/c	Dr.	1,77,000
	To Sales A/c To Output IGST A/c (Sold Goods)			1,50,000 27,000
3	Debtors A/c	Dr.	2,95,000
	To Sales A/c To Output CGST A/c To Output SGST A/c (Sold goods on credit)			2,50,000 22,500 22,500
4	Insurance Premium A/c Input CGST A/c Input SGST A/c	Dr. Dr. Dr.	20,000 1,800 1,800
	To Bank A/c (Insurance premium payment)			23,600
5	Office Furniture A/c Input CGST A/c Input SGST A/c	Dr. Dr. Dr.	60,000 5,400 5,400
	To Bank A/c (Bought office furniture)			70,800
6	Output IGST A/c	Dr.	27,000
	To Input IGST A/c (Availed Input Tax credit up to Rs.27,000 and balance to be adjusted against Output CGST)			27,000
7	Output CGST A/c	Dr.	22,500
	To Input CGST A/c To Input SGST A/c To Bank A/c (Availed Input tax credit and paid balance)			7,200 9,000 6,300
8	Output SGST A/c	Dr.	22,500
	To Input SGST A/c To Bank A/c (Availed Input tax credit availed and paid balance)			7,200 15,300
			8,74,400	8,74,400

Working Note:

Procedure for GST Common Set Off:

	Output IGST (₹)	Output CGST (₹)	Output SGST (₹)
	27000	22500	22500
Input IGST	–27,000 (36000-9000)	–9000	–
Input CGST	–	–7,200 (1800 + 5400)	–
Input SGST	–	–	–7,200 (1800 + 5400)
Payable	Nil	6,300	15,300

Question 5

Pass entries in the books of Sh. Jagdish Mishra of Lucknow (U.P.) assuming CGST @ 6% and SGST @ 6%.

March

Particulars

5 12 14 18 20 31

Purchased goods for ₹ 2,50,000 from Virender Yadav of Patna (Bihar). Sold goods costing ₹ 60,000 at 50% profit to Partap Sinha of Ranchi. Purchased goods for ₹ 70,000 from Ram Nath of Kanpur against cheque. Sold goods at Varanasi (U.P.) Costing ₹ 2,25,000 at 33½% profit less trade discount 10% against cheque which was deposited into the bank. Paid rent ₹ 25,000 by cheque. Payment made of balance amount of GST.

Solution:

Sl.no	Particulars	L.F	Debit (₹)	Credit (₹)
5	Purchases A/c Input IGST A/c	Dr. Dr.	2,50,000 30,000
	To Virender Yadav A/c (Purchased goods on credit)			2,80,000
12	Partap Sinha A/c	Dr.	1,00,800
	To Sales A/c To Output IGST A/c (Goods Sold on credit)			90,000 10,800
14	Purchases A/c Input CGST A/c Input SGST A/c	Dr. Dr.Dr.	70,000 4,200 4,200
	To Bank A/c (Goods bought against cheque)			78,400
18	Bank A/c	Dr.	3,02,400
	To Sales A/c To Output CGST A/c To Output SGST A/c (Goods sold against cheque)			2,70,000 16,200 16,200
20	Rent A/c Input CGST A/c Input SGST A/c	Dr.	25,000 1,500 1,500
	To Bank A/c (REnt paid by cheque)			28,000
31	Output IGST A/c	Dr.	10,800
	To Input IGST A/c (Availed input tax credit)			10,800
31	Output CGST A/c	Dr.	16,200
	To Input CGST A/c To Input IGST A/c To Bank A/c (Availed input tax credit)			5,700 10,500
31	Output SGST A/c	Dr.	16,200
	To Input SGST A/c To Input IGST A/c To Bank A/c (Availed input tax credit and paid balance)			5,700 8,700 1,800
			8,32,800	8,32,800

Question 6

Pass entries in the books of all parties in the following cases assuming CGST @ 6% and SGST @ 6%.

March	Particulars
1 5 10 14	Mahesh Chandra of Bihar purchased goods for ₹ 1,00,000 from Sunil Soren of Jharkhand and sold the same to Deepak Patnaik of Odisha for ₹ 1,50,000. Deepak Patnaik sold goods to Suresh Yadav of Odisha for ₹ 1,80,000. Suresh Yadav sold goods to Ravi Chakravarti of West Bengal for ₹ 2,50,000. Ravi Chakravarti sold goods costing ₹ 2,50,000 to Sanjay Diwedi of West Bengal at a profit of 40% on cost.

Solution:

Journal of Mahesh Chand, Bihar
Sl.no 2018	Particulars	L.F	Debit (₹)	Credit (₹)
March 1	Purchases A/c Input IGST A/c	Dr. Dr.	1,00,000 12,000
	To Sunil Soren (Goods purchased plus 12% IGST)			1,12,000
March 1	Deepak Patnaik	Dr.	1,68,000
	To Sales A/c To Output IGST A/c (Goods sold plus 12% IGST)			1,50,000 18,000
Total			2,80,000	2,80,000

Journal of Sunil Soren, Jharkhand
Sl.no 2018	Particulars	L.F	Debit (₹)	Credit (₹)
March 1	Mahesh Chand	Dr.	1,12,000
	To Sales A/c To Output IGST A/c (Goods sold plus 12% IGST)			1,00,000 12,000

Journal of Deepak Patnaik, Odisha
Sl.no 2018	Particulars	L.F	Debit (₹)	Credit (₹)
March 1	Purchases A/c Input IGST A/c	Dr. Dr.	1,50,000 18,000
	To Mahesh Chand (Goods purchased plus 12% IGST)			1,68,000
March 5	Suresh Yadav A/c	Dr.	2,01,600
	To Sales A/c To Output CGST A/c To Output SGST A/c (Sold goods plus 6% CGST and SGST each)			1,80,000 10,800 10,800
Total			3,69,600	3,69,600

Journal of Suresh Yadav, Odisha
Sl.no 2018	Particulars	L.F	Debit (₹)	Credit (₹)
March 5	Purchases A/c Input CGST A/c Input SGST A/c	Dr. Dr. Dr.	1,80,000 10,800 10,800
	To Deepak Patnaik (Goods purchased plus 12% IGST)			2,01,600
March 10	Ravi Chakravarti A/c	Dr.	2,80,000
	To Sales A/c To Output IGST A/c (Sold goods plus 12% IGST)			2,50,000 30,000
Total			4,81,600	4,81,600

Journal of Ravi Chakravarti, West Bengal
Sl.no 2018	Particulars	L.F	Debit (₹)	Credit (₹)
March 10	Purchases A/c Input IGST A/c	Dr. Dr.	2,50,000 30,000
	To Suresh Yadav (Goods purchased plus 12% IGST)			2,80,000
March 14	Sanjay Diwedi	Dr.	3,92,000
	To Sales A/c To Output CGST A/c To Output SGST A/c (Sold goods costing ₹ 2,50,000 at 40% Profit plus 6% CGST and SGST each)			3,50,000 21,000 21,000
Total			6,72,000	6,72,000

Question 7

Pass entries in the books of Krishnan of Bengaluru (Karnataka) in the following cases:

Particulars

1. Purchased goods from Karunakaran of Chennai for ₹ 1,00,000. (IGST @18%) 2. Sold goods to Ganeshan of Bengaluru for ₹ 1,50,000. (CGST @ 6% and SGST @ 6%) 3. Sold goods to S. Nair of Kerala for ₹ 2,60,000. (IGST @18%) 4. Purchased a Machinery for ₹ 80,000 from Surya Ltd. against cheque. (CGST @ 9% and SGST @ 9%) 5. Paid rent ₹ 30,000 by cheque. (CGST @ 6% and SGST @ 6%) 6. Purchased goods from Ram Mohan Rai of Bengaluru for ₹ 2,00,000. (CGST @ 6% and SGST @ 6%) 7. Paid insurance premium ₹ 10,000 by cheque. (CGST @ 9% and SGST @ 9%) 8. Received commission ₹ 20,000 by cheque which is deposited into bank. (CGST @ 9% and SGST @ 9%) 9. Payment made of balance amount of GST

Solution:

Sl.no	Particulars	L.F	Debit (₹)	Credit (₹)
1	Purchases A/c Input IGST A/c	Dr. Dr.	1,00,000 18,000
	To Karunakaran A/c (Goods purchased on credit)			1,18,000
2	Ganeshan A/c	Dr.	1,68,000
	To Sales A/c To Output CGST A/c To Output SGST A/c (Sold goods on credit)			1,50,000 9,000 9,000
3	S. Nair A/c	Dr.	3,06,800
	To Sales A/c To Output IGST A/c (Sold goods on credit)			2,60,000 46,800
4	Machinery A/c Input CGST A/c Input SGST A/c	Dr. Dr. Dr.	80,000 7,200 7,200
	To Bank A/c (Motorbike purchased against cheque)			94,400
5	Rent A/c Input CGST A/c Input SGST A/c	Dr. Dr. Dr.	30,000 1,800 1,800
	To Bank A/c (Rent paid by cheque)			33,600
6	Purchases A/c Input CGST A/c Input SGST A/c	Dr. Dr. Dr.	2,00,000 12,000 12,000
	To Ram Mohan Rai A/c (Goods purchased on credit)			2,24,000
7	Insurance Premium A/c Input CGST A/c Input SGST A/c	Dr. Dr. Dr.	10,000 900 900
	To Bank A/c (Insurance premium paid by cheque)			11,800
8	Bank A/c	Dr.	23,600
	To Commission A/c To Output CGST A/c To Output SGST A/c (Commission received and deposited in bank)			20,000 1,800 1,800
9	Output IGST A/c	Dr.	18,000
	To Input IGST A/c (Input tax credit availed)			18,000
10	Output CGST A/c Output SGST A/c	Dr. Dr.	10,800 10,800
	To Input CGST A/c To Input IGST A/c (Input tax credit availed)			10,800 10,800
11	Output IGST A/c	Dr.	28,800
	To Input SGST A/c To Input IGST A/c To Bank A/c			11,100 11,100 6,600
			10,48,600	10,48,600

Question 8

Prepare a book for all the parties mentioned below assuming CGST and SGST 9% each.

2018
April 5 April 7 April 15 April 20	Goods sold by manufacturer Anu of Delhi to a dealer Biraj of Delhi for ₹50,000 Sold goods by Biraj to Chandan of Punjab for ₹1,20,000 Sold goods by Chandan to Deepa of Punjab for ₹1,50,000 Sold goods by Deepa to Eila of Maharashtra for ₹1,50,000 at a profit of 33 ½% on cost.

Solution:

Journal For Anu
Date	Particular	L.F	Amount Dr. ₹	Amount Cr. ₹
2018 April 5	Biraj Dr. To Sales A/c To Output CGST A/c To Output SGST A/c		59,000	50,000 4,500 4,500

Journal For Biraj
Date	Particular	L.F	Amount Dr. ₹	Amount Cr. ₹
2018 April 5	Purchase A/c Dr. Input CGST A/c Dr. Input SGST A/c Dr. To Anu (Goods purchased within the same state)		50,000 4,500 4,500	59,000
April 7	Chandan Dr. To Sales A/c To Output IGST A/c (Goods sold outside the state)		1,41,000	1,20,000 21,600

Journal For Chandan
Date	Particular	L.F	Amount Dr. ₹	Amount Cr. ₹
2018 April 7	Purchase A/c Dr. Input IGST A/c To Biraj (Goods purchased from outside the state)		1,20,000 21,000	1,41,600
April 15	Deepa Dr. To Sales A/c To Output CGST A/c To Output SGST A/c (Goods sold within the same state)		1,77,000	1,50,000 13,500 13,500

Journal For Deepa
Date	Particular	L.F	Amount Dr. ₹	Amount Cr. ₹
2018 April 15	Purchase A/c Dr. Input CGST A/c Input SGST A/c To Chandra (Goods purchased within the same state)		1,50,000 13,500 13,500	1,77,000
April 20	Eila Dr. To Sales A/c To Output IGST A/c (Goods sold outside the state costing ₹1,50,000 at a profit of 33 ½% on cost)		2,36,000	2,00,000 36,000

Journal For Eile
Date	Particular	L.F	Amount Dr. ₹	Amount Cr. ₹
2018 April 5	Purchase A/c Dr. Input IGST A/c Dr. To Deepa (Goods purchased from outside the state)		2,00,000 36,000	2,36,000

Question 9

Pass entries in the books of Ashok Bros. assuming that all transactions have been entered within Delhi and assuming CGST @6% and SGST @ 6%.

2018
Jan 2 5 10 20 22 31	Purchased goods for ₹2,00,000 Sold goods for ₹3,00,000 on credit Purchased computer printer for office for ₹50,000 and payment made by cheque Paid legal consultation fee ₹10,000 Paid rent ₹20,000 by cheque Payment made of the balance amount of GST

Solution:

	Journal of Ashok Bros.
Date	Particular		L.F	Amount Dr. ₹	Amount Cr. ₹
2018 Jan 2	Purchase A/c Input CGST A/c Input SGST A/c	Dr. Dr. Dr.		2,00,000 12,000 12,000
	To Creditor A/c (Purchase of goods on credit)				2,24,000
Jan 5	Debtors A/c	Dr.		3,36,000
	To Sales A/c To Output CGST A/c To Output SGST A/c (Sales of goods on credit)				3,00,000 18,000 18,000
Jan 10	Office Equipment A/c Input CGST A/c Input SGST A/c	Dr. Dr. Dr.		50,000 3,000 3,000
	To Bank A/c (Purchased computer printer)				56,000
Jan 20	Office Equipment A/c Input CGST A/c Input SGST A/c	Dr. Dr. Dr.		10,000 600 600
	To Cash A/c (Paid legal consultation fee)				11,200
Jan 22	Rent A/c Input CGST A/c Input SGST A/c	Dr. Dr. Dr.		20,000 1,200 1,200
	To Bank A/c (Paid rent)				22,400
Jan 31	Output CGST A/c (working note) Output SGST A/c	Dr. Dr.		18,000 18,000
	To Input CGST A/c To Input SGST A/c To Bank A/c (₹1,200 + ₹1,200) (Adjustment of GST and payment of balance amount)				16,800 16,800 2,400
	Total ₹			6,85,600	6,85,600