📌 Advanced Accounting Case Study with GST, TDS & Loan EMI

Now, let's apply real-world accounting concepts by including:
✅ GST (Goods & Services Tax)
✅ TDS (Tax Deducted at Source)
✅ Loan & EMI Calculation

1️⃣ Business Scenario: ABC Traders

📌 ABC Traders sells electronic gadgets and has the following transactions:

Purchased inventory worth ₹1,00,000 + 18% GST (₹18,000).
Sold goods worth ₹1,50,000 + 18% GST (₹27,000).
Paid office rent ₹10,000 + 18% GST (₹1,800).
Paid ₹50,000 salary to an employee (TDS 10%).
Took a ₹5,00,000 loan @ 12% annual interest, repayable in 12 months.

2️⃣ GST Calculation

Transaction	Amount (₹)	GST (18%)	Total (₹)
Purchase of Inventory	1,00,000	18,000	1,18,000
Sale of Goods	1,50,000	27,000	1,77,000
Office Rent	10,000	1,800	11,800

📌 Net GST Payable = GST on Sales - GST on Purchases & Expenses
= ₹27,000 - (₹18,000 + ₹1,800)
= ₹7,200 (to be paid to the government)

3️⃣ TDS Calculation

Salary Paid = ₹50,000
TDS (10%) = ₹5,000
Net Salary Paid to Employee = ₹50,000 - ₹5,000 = ₹45,000
TDS Payable to Govt. = ₹5,000

4️⃣ Loan EMI Calculation

📌 Loan Details:

Loan Amount = ₹5,00,000
Interest Rate = 12% annually (1% per month)
Tenure = 12 months

EMI Formula:

EMI = \frac{P \times r \times (1+r)^n}{(1+r)^n - 1}

where:
P = ₹5,00,000, r = 1% per month, n = 12 months

📌 Calculated EMI = ₹44,337 per month

5️⃣ Updated Financial Statements

Income Statement (Including GST, TDS, Loan EMI)

Particulars	Amount (₹)
Revenue (Sales including GST)	1,77,000
Less: GST Payable	(7,200)
Net Revenue (Excluding GST)	1,50,000
Less: Expenses
Inventory Purchase	(1,00,000)
Rent (Excluding GST)	(10,000)
Employee Salary (Net)	(45,000)
Loan EMI (First Month)	(44,337)
Profit Before Tax	₹50,663
Less: Income Tax (25%)	(12,666)
Net Profit After Tax	₹38,000

📌 Key Takeaways:

GST impacts revenue and expenses; ₹7,200 needs to be paid to the govt.
TDS reduces cash flow but helps in tax compliance.
Loan EMI significantly affects cash flow but includes both principal + interest.

Balance Sheet (Including Loan & Tax Payable)

Assets	Amount (₹)	Liabilities & Equity	Amount (₹)
Cash	2,00,000	Loan Payable	4,55,663
Inventory	1,00,000	GST Payable	7,200
Accounts Receivable	1,50,000	TDS Payable	5,000
Furniture	20,000	Owner’s Equity	38,000
Total Assets	₹4,70,000	Total Liabilities & Equity	₹4,70,000

📌 Key Takeaways:

Loan liability is still ₹4,55,663 after the first EMI.
GST ₹7,200 and TDS ₹5,000 are pending payments.
Business has ₹2,00,000 cash for future operations.

Final Cash Flow Statement (Including EMI, TDS, & GST Payments)

Activity	Cash Inflow (₹)	Cash Outflow (₹)
Sales Collection (Including GST)	1,77,000	-
Loan Received	5,00,000	-
Purchase Payment	-	1,18,000
Rent Paid	-	11,800
Salary Paid (After TDS)	-	45,000
Loan EMI Paid	-	44,337
TDS Paid to Govt.	-	5,000
GST Paid to Govt.	-	7,200
Net Cash Flow	₹6,77,000	₹2,31,337
Closing Cash Balance	₹2,00,000

📌 Key Takeaways:

Loan inflow boosts cash, but EMI & tax payments reduce it.
Cash flow is still positive, meaning the business can continue operating smoothly.

💡 Final Summary & Learning Points

✅ GST is paid only on profit margin after adjusting purchases.
✅ TDS reduces salary payments but helps with tax compliance.
✅ Loan EMI significantly impacts cash flow & must be planned carefully.
✅ Net profit is ₹38,000 after all deductions & taxes.

📌 Advanced Accounting Case Study with GST, TDS & Loan EMI