Journal entry

dear dimple, you have not mentioned that the amount shown as sales Rs.40000, is only after charging s.tax, trade discount or not. It should be shown in  the bill itself. reply for this and I will tell you the JV sekar

40000 is before charging discount and sales tax

Dear friend, we assume you are selling to Mr.A. on credit basis.  You should add profit rs.8000/- with cost rs.40000/- and allow trade discount rs.8000/-(20% on sales) that comes about rs.40000/- balance and 8% sales tax for 40000/- comes about rs.3200/- then total is Rs.43200/-.

The JV is:                                               DR                                CR

                 Mr.A's a/c                          43200-00

                Discount allowed              8000-00

                 Sales a/c                                                               48000-00

                 8% sales tax a/c                                                     3200-00

(Being sales made to Mr.A on credit).

I hope it is clear. If you any doubt  mail to me : machenggco @ bsnl.in.

B.SEKAR