Hitech Tally Academy

Which taxes at the Centre and State level are being subsumed into GST?

Answer:

At the Central level, the following taxes are being subsumed:

Central Excise Duty,
Additional Excise Duty,
Service Tax,
Additional Customs Duty commonly known as Countervailing Duty, and
Special Additional Duty of Customs.

At the State level, the following taxes are being subsumed:

Subsuming of State Value Added Tax/Sales Tax,
Entertainment Tax (other than the tax levied by the local bodies), Central Sales Tax (levied by the Centre and collected by the States),
Octroi and Entry tax,
Purchase Tax,
Luxury tax, and
Taxes on lottery, betting and gambling.

Example 2

Example 2

M/s A &S Enterprise

Trial Balance

As on 31^st Dec 2014

Particulars	Debit	Credit
Stock as at 1^st Jan 2014	28,000
Capital		500,000
Drawings	12,000
Cash	13,500
Bank A/c	47,600
Creditors A/c		38,300
Debtors A/c	45,500
Furniture A/c	200,000
Machinery A/c	325,000
Purchase A/c	127,000
Purchase return A/c		4,800
Sales A/c		278,000
Sales return A/c	5,600
Salary A/c	8,000
Discount A/c		1,500
Rent A/c	8,500
Insurance A/c	1,250
Carriage A/c	850
Bad debts A/c	1,250
Provision for bad debts A/c		2,150
Freight A/c	700
	824,750	824,750

Adjustments

1. Closing stock was valued at Rs. 34,000

2. Outstanding Salary Rs. 2,000 and Outstanding Rent Rs. 1,000

3. Prepaid Insurance Rs. 250

4. Write off Rs. 500 as further Baddebts

5. Provide provision for bad debts at 5% on debtors

6. Depreciate Machinery at 10% and Furniture at 5%

From desk top open Tally,

Then you will get Company information window. If you get Gateway of Tally, Press Alt + F1 to close the company

Then create a new company using the option create company. See the fig.

Give company name and other details.

After creating company, create every ledgers from Accounts info- Ledgers- in multi ledgers, create

Then you will get multiple ledger creation windows. Then create every ledger except cash like the picture given below

after this save it by pressing Ctrl+ A

for giving the amount of cash,
in single ledger select Alter- then select cash
in opening Balance give the amount of Cash Rs. 13,500 see the Picture.

After that check the Trial Balance from Gateway of Tally- Display- Trial Balance then press F5 for ledger wise display

See the adjustments

1.       Closing stock was valued at Rs. 34,000

For giving the value of closing stock, from Gateway of Tally- Accounts info- Ledgers- Alter- Stock(which you already given), then in closing balance  give company date ie 01-04-2014 and accept it by pressing enter key

2.       Outstanding Salary Rs. 2,000 and Outstanding Rent Rs. 1,000

Outstanding expense means expense due but not paid. So it is a liability to the business. So it shown on the liability side if the Balance sheet and in Trading and profit or Loss A/c it should be added to the concerned expenses. The journal entry is that,

Expense A/c ………………………….Dr

Outstanding expense

In this example salary and rent are outstanding. So the journal entry for this,

Salary A/c …………………………….Dr

Outstanding Salary A/c

In Tally you should give the journal entry.

From Gateway of Tally Accounting Voucher

Every adjustment are non cash transactions. So select Journal voucher by pressing F7

Here in

Dr. Salary A/c      1000

Cr. Outstanding Salary A/c    1000

for creating Outstanding salary  Press Alt + C( it is the short cut key for secondary ledger creation) outstanding salary under the head of current liabilities

Prepaid insurance Rs 250

Prepaid expanse means expense paid in advance. So it is an asset to the business so it shown on the asset side of the balance sheet. In the trading and profit or loss account, it will be deducted from the concerned expense. The journal entry is that,

Prepaid expense A/c………………. Dr.

Expenses A/c

The above example,

Dr. prepaid insurance (current asset)

Cr. Insurance

For creating prepaid insurance press ALT +C and create it under the of current asset

Write off Rs 500 as further bad debts

Bad debts refer to irrecoverable portion of sundry debtors. That is the amount that the form has not been able to realize from its debts. It is regarded as a loss and shown on the debit side of the Profit& Loss A/c. In the Balance sheet it deducted from Sundry Debtors. The journal entry is that,

Bad debts A/c…………..Dr

Sundry debtors

Provide provision for bad debts @ 5% on sundry debtors

It is a normal course business operation that sum debts prove irrecoverable, which means that the amount to be realized from them becomes bad. In view of this, an attempt is made to bring in certain element of certainty in the amount irrespect of bad debts charged every year against income. This attempt takes the form of maintaining a provision designed to cover the loss of bad debts is called provision for bad debts. It created from sundry debtors. So in the balance sheet it deducted from sundry debtors. It is an expense to the business, so it shown on the debit side of profit & loss A/c. the journal entry is that,

Provision for bad debts A/c ………….Dr.

Sundry debtors

In the above example,

Dr Provision for bad debts A/c

Cr sundry debtors A/c

For calculating the amount of provision, press ALT+ C on the amount column, it will be activated the calculator area. Here you should type (45500-500)*5% then press enter key then you will get the correct amount on the amount column

Depreciate machinery @10% and furniture @5%

Depreciate means declining value of asset due to wear & tear or usage or passage of time. It is business expenditure, so it shown on the debit side of the profit or Loss A/c. in the balance sheet, it is deducted from the concerned asset. The journal entry is that,

Depreciation A/c ……………Dr,

Fixed asset A/c

In the above example,

Dr. Depreciation on machinery A/c (under indirect expense)

Cr. Machinery A/c

For calculating amount press ALT+C on the amount column, then type 325000*10% then press enter key.

Depreciation on furniture

Dr. Press ALT +c depreciation on furniture A/c press ALT +C 200000*5%

Cr. furniture A/c

Result

Gate way of tally- profit & Loss A/c

For detailed result press ALT +F1

For close this window ESC key

Balance sheet

Gate way of tally- Balance sheet for detailed result Press ALT +F1

If you want to check the Trail Balance

Gate way of tally –display-trail balance

For detailed result press ALT +f1

For ledger wise display Press F4

If you want to see the journal entry-

Gate way of tally- display –day book

Learning Tally Example 1

Mr. Anil Malviya, Director HGI Bhopal

Tally accounting soft ware is used to maintain and store daily business transactions like payments, receipt, sales, purchase, deposits, withdrawals etc. through different voucher types. The soft ware is having the facility to apply the principles of debit and credit in accounting and one of the best accounting soft ware available at present

Learning Tally with assignment

M/s Arjun ltd. Co.

2010 Oct:1 Arjun started a business with cash Rs. 10,00,000

Oct: 2 Received a bank loan from HDFC Bank Rs. 5,00,000

Opened a bank account with Bank SBT Rs. 2,00,000

Oct: 3 Bought Furniture from Furniture Mart Rs. Rs. 1,00,000

Advertisement payable to Media Advertiser Rs. 1,00,000 (Inv. No. 1284, due days 10 days)

Oct: 4 Paid printing charge Rs. 500

Bought Machinery Rs. 1,20,000

Oct: 5 Purchased goods from Aroma Traders Rs. 85,000 (bill No: 108)

Purchased goods for cash Rs. 10,000

Oct: 6 Telephone charge paid by SBT cheque Rs. 1800 (Ch No:123456789)

Oct: 7 Cash sales Rs. 50,000

Oct: 8 Goods returned to Aroma traders Rs. 5,000 (agst Bill No: 108)

Oct:10Cash paid to Aroma Traders Rs. 25,000 (Bill 108)

Oct: 11Sold goods to Kishore Rs. 40,000 ( Bill No: 2)

Oct: 12Cash received from Kishore Rs. 25,000 (Bill No: 2)

Oct: 13Goods returned from Kishore Rs. 5,000 (Bill No: 2)

Oct:15Cash withdrawn from SBT Bank Rs. 10,000

Oct: 16 Paid loan of HDFC Rs. 1,00,000

Oct: 17 Cheque of Bank SBT issued to Furniture Mart Rs. 50,000

Oct: 18 SBT Cheque issued to Media Advertiser Rs. 50,000

Oct: 25 Cash withdrawn from SBT Bank for personal use Rs. 5,000

Oct: 30 Paid salary Rs. 12,000

How to create company

Double clicking on the tally icon will open tally.

Or from start menu- Programs- Tally.ERP9

Tally opening screen will look like as follows.

From here press Alt + F1 (to shut company)

Then select the option create company.

Insert the following details.

Directory: C:\ Tally .ERP9 \ Data (this is the default directory and folder. if necessary you can change this at the time of tally software installation or you can directly change from the creation window. (d:\ Tally\Data) i.e., you only type the path or drive where you want to store your data)

Name: M/s Arjun Ltd.( ie, company name )
Address
Select the country and state
Give Pin code,telephone no, mobile no and e-mail address
if you want auto back up then, Enable auto backup Yes
Currency symbol
Maintain- Accounts only or accounts with inventory. (Specify whether you want to maintain only financial books of accounts or both accounts and inventory)
If you want to give inventory details, then you should select Accounts with inventory
Then give Financial Year and Books beginning
Financial year from ( Tally considers 12 months from the date you give here as the Financial year 01/01/2010)
Books beginning ( in this case, it is 01/10/2010)
Tally Vault Password: here you can give a password
Use Security Control: If you want to control over accessing tally data, give Yes

Your company is created. Then you can see the Gateway of Tally. The button panel of this shows:-

F1- Select Company ( Here you can open your company from the list of companies).

F1( Press Alt + F1)- Shut Company ( To close a company)

F2- Change Date( Here you can change the current date)

F2( Press Alt + F2) (To change current period of Company)

Ledger Creation
From Gateway of Tally go to Accounts info - Ledger- Create

Here Type Capital A/c

Then select Capital Account from the List of Group

Like this create the following Ledgers

Ledgers	Group
Loan HDFC A/c	Loans Liability
Bank SBT A/c	Bank Account
Furniture A/c	Fixed asset
Furniture Mart A/c	Sundry Creditors
Advertisement A/c	Indirect Expense
Media Advertiser A/c	Sundry Creditors
Printing charge A/c	Indirect Expense
Machinery A/c	Fixed asset
Purchase A/c	Purchase Accounts
Aroma traders A/c	Sundry Creditors
Telephone charge A/c	Indirect Expense
Sales A/c	Sales Account
Purchase Return A/c	Purchase Accounts
Kishore A/c	Sundry Debtor
Sales Return A/c	Sales Account
Drawings A/c	Capital Account
Salary A/c	Indirect Expense

After that Press Esc key for Quit Ledger Creation window

Then from Gateway of Tally Select Accounting Vouchers

Then you will get:-

This is called Vouchers. . On the Button Panel you can see the different type of vouchers.

F4 – Contra (To record transaction between Cash and Bank. i.e. Cash deposited into Bank and Cash withdrawn from Bank for office use.)

F5 – Payment (To record Cash and Bank Payments)

F6 – Receipt (To record Cash and Bank receipts)

F7 – Journal (To record non cash transactions)

F8 – Sales (To record Cash Sales and Credit Sales)

F9 – Purchase (To record Cash and Credit Purchase)

For Sales Return and Purchase Return

Press F11 for features

Then you will get :-

Here select Use Debit/Credit Notes ? Yes

Then Press

Ctrl + F8 – Credit Note (To record sales return)

Ctrl + F9 – Debit Note (To record Purchase return)

See the first transaction

2010 Oct:1 Arjun started a business with cash Rs. 10,00,000
To record this Press F6 for Receipt Voucher. If you want to change the current date Press F2 and give the date
then in
Cr select Capital A/c Type Amount 1000000
Dr select Cash A/c Press Enter Key
Then Give Narration if necessary
Press enter key and accept it.

Like that give every transactions

Oct: 2 Received a bank loan from HDFC Bank Rs. 5,00,000

Press F2 then change date

Opened a bank account with Bank SBT Rs. 2,00,000

Press F4 for Contra Voucher

Oct: 3 Bought Furniture from Furniture Mart Rs. Rs. 1,00,000

Press F2 give date

Press F7 for Journal Voucher

Dr Furniture A/c

Cr Furniture Mart A/c
then give bill details and accept it

Advertisement payable to Media Advertiser Rs. 1,00,000 (Inv. No. 1284, due days 10 days)

Press F7 for Journal Voucher

Oct: 4 Paid printing charge Rs. 500

press F5 for Payment Voucher and change date

Bought Machinery Rs. 1,20,000

Oct: 5 Purchased goods from Aroma Traders Rs. 85,000 (bill No: 108)
Press F9 (Purchase)
then Press F2 for change date

Cr Aroma Traders A/c
Dr Purchase A/c

Oct: 6 Telephone charge paid by SBT cheque Rs. 1800 (Ch No:123456789)
Press F2 give date

Oct: 7 Cash sales Rs. 50,000

Press F8 then press Ctrl + V to change format of sales voucher. i.e. invoice mode to debtor creditor mode
then give
Dr Cash A/c
Cr Sales A/c