Question
Why fixed assets are not shown in the books at market value?
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Answer
Fixed assets are not shown in the books at market value because:
- As per historical concept, we record fixed assets at original cost, and.
- As per going concern concept, the assets are not going to be sold in the near future. Hence, the market value is irrelevant.
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Ignore adjustment and payment of GST.
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2019
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June 10
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Purchased goods from Ravichandran of Madurai of the list price of ₹ 2,00,000 at 25% trade discount at 4% cash discount on purchase price of goods. Paid CGST and SGST @ 9% each. Paid the entire amount by cheque on the same date. |
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June 25
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Sold goods to Ramalingam of Erode of the list price of ₹ 3,75,000 at 20% trade discount and 2% cash discount on sale price. Charged CGST and SGST @ 9% each. Full amount was received by cheque on the same date.
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X started a business on $1^{\text {st }}$ April, 2013 with a Capital of $₹ 1,00,000$ and a loan of $₹ 50,000$ from the bank. On $31^{\text {st }}$ March, 2014, his assets were $₹ 1,75,000$. Find out his Capital as on $31^{\text {st }}$ March, $2014$ and profit earned during the year $2013-14.$
→Enter the following transactions in the Journal of Arun Govil & Co.
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2018
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June 1
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Arun Govil & Co. paid into bank as capital ₹ 6,00,000.
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Jane 3
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Purchased goods from Mukesh of the list price of ₹ 2,00,000 at 10% trade discount.
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June 4
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One-fourth of the above goods returned to Mukesh for not being upto specifications.
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June 6
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Issued a cheque to Mukesh for the amount due to him after deducting 2% as cash discount.
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June 7
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Withdrew from bank ₹ 2,50,000 for office use and ₹ 10,000 for personal use.
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June 10
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Purchased a machinery for ₹ 1,00,000 and spent ₹ 5,000 on its installation. Payment for machinery was made by cheque and installation expenses were paid in cash.
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June 12
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Sold goods for ₹ 1,00,000 to Amar.
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June 13
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Amar clears his account by giving a cheque of ₹ 98,500. Cheque is immediately sent to bank.
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June 15
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Purchased stationery for personal use ₹ 3,000 and for office use ₹ 5,000.
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June 20
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Purchased land for ₹ 2,00,000 and paid 1% as brokerage and ₹ 15,000 as registration charges on it. Entire payment is made by Cheque.
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June 30
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Wages due to labourers ₹ 20,000 and salary due to the clerk ₹ 30,000.
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