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8/10/2019 Subsidiary Books BBA.com

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SUBSIDIARY BOOKS

In business most of the transactions relate toreceipt of cash, payments of cash, sale of goods

and purchase of goods. So it is convenient tohave separate books for each such class oftransaction, one for receipts and payments ofcash, one for purchase of goods and one for sale

of goods. These books are called subsidiarybooks.


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TYPES OF SUBSIDIARY BOOKS

Cash Book: Recording all Cash receipts & cashpayments

Purchase Day book Recording all credit

purchasesSale Day Book Recording all credit sales

Purchase Return Book Recording all Purchasereturn

Sales Return book Recording all Sales return

Bills Receivable book - Recording allReceivable

Bills Payable book - Recording all Payable


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CASH BOOK

Cash book is a subsidiary book, which

records the receipts and payment ofcash. With the help of cash book cashand bank balance can be checked at

any point of time.


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TYPES OF CASH BOOK

Cash book can be of Three types:

1. Simple (single column) Cash Book.2. Two column (Double column) cash book.3. Three column (Triple column) cash book.


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SIMPLE (SINGLE COLUMN)

CASH BOOK

A simple (Single column) cash book isprepared like any ordinary account.The receipts are recorded in the Drside and the payments are recorded in

the Cr side of the cash book.


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SIMPLE CASH BOOK

Format: Simple (Single column cash book)

Date Particulars Amt. Date Particulars Amt.

To bal b/dTo.To

XxxXxxxxx

ByBy.By bal. c/d

XxxXxxxxx

xxx xxx

Simple Cash BookDr. Cr.

The opening balance of cash is recorded in Dr.side

All receipts are recorded in Dr side

All payments are recorded in Cr side


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SIMPLE CASH BOOK

Balancing the Cash Book

The Cash book is balanced like anyother account. The receipts columntotal will be more than the paymentscolumn total. The difference will bewritten on the Cr. Side as By Bal c/d.


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ILLUSTRATION

Enter the following transactions in simpleCash Book.

2006

Jan 1 Cash in hand 12000

Jan 5 Received from Ramesh 3000

Jan 7 Paid Rent 3000 Jan 8 Sold goods 7000

Jan 10 Paid Sohan 2000


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SIMPLE CASH BOOK

Solution:

Date Particulars Amt. Date Particulars Amt.

1-1-20055-1-20058-1-2005

To bal b/d

To Ramesh

To Sales

12000

3000

7000

7-1-200510-1-200531-1-2005

By Rent

By Sohan

By bal. c/d

3000

2000

17000

22000 22000

Simple Cash BookDr. Cr.


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Exercise:

Enter the following transactions in thesimple cash book.

2005

Dec 1. Cash in Hand 10,000

Dec 2 Received from Ramesh 13,000

Dec 3 Purchased Furniture 15,000

Dec 4 Machinery Sold 10,000

Dec 5 Goods sold 20,000

Dec 6 Salaries paid 1,000


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TWO COLUMN CASH BOOK

A two column cash book recordsdiscount allowed and discount receivedalong with the cash payments and cash

receipts.Note:Discount columns are not balanced they

are only totaled


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TWO COLUMN CASH BOOKFormat: Two (Double) column cash book

date

Particulars

discount

cash date

Particulars

discount

cash

To bal b/dTo .. xx

XxxXxx

ByBy bal. c/d

xx XxxXxx

xx xxx xx xxx

Two Column Cash BookDr. Cr.

All receipts are recorded in Dr side (cash column)All payments are recorded in Cr side (cash column)The discount columns are totaled but notbalanced.The cash columns are balanced in the samemanner as indicated for the simple cash book.


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ILLUSTRATIONS Enter the following transactions in a two-column cash

Book. 2005 Jan 1 Cash in hand 15,000 Jan 5 Paid to Mohan 3,000

Discount allowed by him 100 Jan 6 Purchased goods 4,000 Jan 10 Received from Vijay 9,800

Discount allowed 200 Jan 11 Sold goods 4,000

Jan 12 Paid to Shyam 2,950 Discount received Rs. 50 Jan 13 Paid wages 500 Jan 14 Paid to Rajesh Rs 3900 in full settlement of his

Account, which shows a Cr. Balance of Rs. 4000


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TWO COLUMN CASH BOOKSolution:

date Particulars

discount

cash date Particulars discount

cash

1-1-200510-1-200511-1-2005

To bal b/d

To vijay

To sales

200

15000

9800

4000

5-1-20056-1-200512-1-200513-1-200514-1-200531-1-2005

By Mohan

By Purchase

By shyam

By Wage

By Rajesh

By bal. c/d

100

50

100

3000

4000

2950

500

3900

14450


E i


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Purchased Furniture

Purchased Goods

Sold Goods for Cash

Purchased Goods

Paid Cash to Ram

Discount allowed by him

Received Cash from Kaviraj and Co.Allowed Discount

Paid for petty exp.

Cash Purchases

Cash Sales Recd from Ram & Sons

Paid for Typewriter

Paid for Telephone

Paid Aggarwal brothers

They allowed discount

April 1

April 2

April 3

April 4

April 5

April 6

April 7

April 8

April 9

April 10

April 11

April 12

April 13

2,500

3,000

1,500

2,000

5,600

100

6,000

200

150

1,500

2,0006,000

8,000

2,000

4,000

Exercise:


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THREE COLUMN CASH BOOK

A three column cash Book is a cashbook, which contains bank columnalong with cash and discount columns.


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THREE COLUMN CASH BOOKFormat: Three (Triple) column cash book

date

Particulars

discount

bank cash date

Particulars

discount

bank cash

To bal b/d

ToTo bal. c/d

Xxx

Xxxxxx

Xxx

..

By

By bal. c/d

xx Xxx

xxx

Xxx

Xxx

xx xxx xxx xx xxx xxx


All bank receipts are recorded in Dr side (bank cloumn)All bank payments are recorded in Cr side (bank column)All Cash receipts are recorded in Dr side (cash cloumn)All cash payments are recorded in Cr side (cash column)


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- The discount columns are totaled but not balanced.

- The cash columns are balanced exactly in the

same manner as indicated for the simple cash book.

The process is similar for balancing the bank

columns also. It is possible, that the bank may allow

the firm to withdraw more than the amount

deposited, i.e. to have an overdraft. In such a casethe total of the bank column on the credit side will

be bigger than the one on the debit side. The

difference is written on the debit side as To Bal

c/d.

BALANCING THREE COLUMN CASH BOOK


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THREE COLUMN CASH BOOK- Contra entry

1) When cash is paid into bank the entry passed

isBank A/C Dr. (Bank balance increased)

To Cash A/C (Cash balance decreased)This type of transaction affects both cash and

bank and these are called contra transactions

2) When cheque is received two entries arepassed

Cash A/C Dr. (When cheque is received)To Debtors

Bank A/C Dr. (When cheque is deposited)

To Cash


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ILLUTRATIONS Enter the following transactions in a Three-

column cash book. Cheques are first treated ascash receipts

2005 Rs.

Jan 1 Cash in hand 20000 Jan 2 Paid into Bank 19000

Jan 3 Receives cheques from Kirti and Co 600

Jan 4 Pays into bank Kirti and Cos Cheque 600 Jan 5 He pays Ratan and Co. by Cheque and is

allowed discount of Rs. 20 330


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THREE COLUMN CASH BOOKSolution:

date Particulars

discount

bank cash date Particulars

discount

bank cash

1-1-20052-1-20053-1-2005

4-1-2005

To bal b/d

To cash

To kirti &com

To cash

C

c

19000

600

20000

600

2-1-20054-1-20055-1-2005

31-1-2005

By bank

By bank

By Ratna& com.

By bal. c/d

c

c

20 330

19270

19000

600

1000

19600 20600 20 19600 20600

Three Column Cash BookDr. Cr.


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Exercise:

Enter the following transactions into athree-column cashbook.

2005 Rs.

Feb 1 Cash in hand 10,000 Feb 2 Receives cheques from Warsi 0f

4700 and Allows him discount Rs. 300

Feb 3 Pays by cheque for cashpurchases 2,000

Feb 4 Sundry exp. paid in cash 500

P h D B k


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Purchases Day Book:

Purchases book or purchases day

book is a book of original entry

maintained to record credit purchases.

You must note that cash purchaseswill not be entered in purchases day

book because entries in respect of

cash purchases must have been

entered in the cash book.


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Purchases Day Book:Invoice: When credit purchased of goods was

made a supplier sent a statement called invoice

indicating quantity, price, value ,trade & cash

discount and the condition under which payment is

expected.

Trade discount: is a discount offered by suppliersto the retailers to encourage bulk purchase.

Generally it is concession off the list price, hence

deducted from invoice & not necessary to maintain

further records.

Cash discount: is a discount offered to encourage

early payment of credit sales. Ledger account

should maintained discount allowed & received.


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Purchases Day Book:

-No Cash Purchase

-No Fixed Asset Purchase-No Cash Discount

Purchases Day Book: Format


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Purchases Day Book: Format

Date Particulars InvoiceNo

L.F Details Amt

.

.

....

A) Supplier name

@Rs..

@Rs..

Less:trade discount

B) Supplier name

@Rs..@Rs..

Less:trade discount

Total

Xxx

Xxx

Xxx

Xxx

XxxXxx

Xxx

xxx

Xxx

Xxx

xxx


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Purchase day bookPosting to Ledger

Date

Particulars J.F Amt Date Particulars J.F

Amt

To Cash A/c

To sundries

(credit purchase)

Xxx

xxx

xxx

Total purchase A/c Cr.Dr.

Suppliers (individual) A/cDr. Cr.

Dat

e

Particulars J.F Amt Date Particulars J.F Amt

By Purchase xxx

xxx

P h D B k Ill t ti


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Purchases Day Book: Illustrations

prepare the purchases day book of a M/s Universal

Book Stores and post it into ledger for July 2009:-

2009 July 5 Purchased books from Kalyan publisher:

12 Advance Accounting @ Rs 45

24 Double entry Book keeping @ Rs 30

(Trade discount 15%)2009 July 17 Purchased Furniture on credit of Rs

10,000 from furniture house ltd.

2009 July 22 Purchased books from Kitab mahal:

8 Statistics for bachelors @ Rs 2510 Economics Intermediate @ Rs 20

(Trade discount 10%)

2009 July 27 Purchased books on cash from swostik

prakasha:10 Management @ Rs 28

Purchases Day Book of M/s Universal book store for July 2009


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Purchases Day Book of M/s Universal book store for July 2009

Date

2009

Particulars Inv.no

L.F

Details

Amt

July 5

July22

A) Kalyan publisher

Adv.Accounting 12@Rs45

Double entry 24@Rs30

Less:trade discount @15%

B) Kitab mahal

statistics 8@Rs25Economics 10@Rs20


Total

540

480

1020153

200200

400

40

867

360

1227


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Purchase day bookPosting to Ledger

Date Particulars J.F

Amt Date

Particulars J.F

Amt

27 july

31 july2009

To Cash

To sundries

(credit purchase)

2800

1227

Date

Particulars J.F

Amt Date Particulars J.F Amt

5 july2009

By Purchase 867

Total purchase A/c Cr.Dr.

M/s universal book store A/cDr. Cr.

Kitab Mahal A/c

Date

Particulars J.F


22 july

2009

By Purchase 360

Cr.Dr.

Purchases Returns Book:


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Purchases Returns Book:

Purchases returns bookis a book in whichthe goods returned to suppliers arerecorded. It is also called returns outwardbookor purchases returns day book.

Goods may be returned because they are of

the wrong kind or not up to sample orbecause they are damaged etc.Debit Note:

When the goods are returned to the

suppliers, an information is sent to themknown as a debit note. A debit note is astatement sent by a businessman to anotherperson, showing the amount debited to the

account of the later.

Purchases Return Book: Format


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Purchases Return Book: Format

Date Particulars Debitnote

L.F Details Amt

.

.

....

A) Supplier name

@Rs..

@Rs..

Less:trade discount

B) Supplier name

@Rs..@Rs..

Less:trade discount

Total

Xxx

Xxx

XxxXxx

XxxXxx

Xxx

xxx

Xxx

Xxx

xxx

P h t P ti t L d


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Purchase return Posting to Ledger

Date

Particulars J.F Amt Date Particulars J.F

Amt

By sundries xxx

xxx

Return outward A/c Cr.Dr.

Suppliers (individual) A/cDr. Cr.

Dat

e

Particulars J.F Amt Dat

e

Particulars J.F Amt

To Returnoutward

xxx

xxx


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Purchases Return Book:

Illustrations

Record the following transactions in the books of

Kailash traders.

2009 Jan 6 Returned to shyam & Co :12 Cup @ Rs 5

20 Plate @ Rs 4

(Trade discount 5%)

2009 Jan 27 Returned to Roshan:8 Cup @ Rs 5

10 Plate @ Rs 4


P h R t B k f K il h T d f J


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Purchases Return Book of Kailash Traders for JanuaryDate Particulars Inv

.noL.F

Details

Amt

Jan 6

Jan27

A) Shyam & Co.

12 Cup@ Rs 5

10 Plate@ Rs 4


B) Roshan

8 Cup@ Rs 520 Plate@ Rs 4


Total

60

40

1005

4080

120

12

95

108

203

P h b k P i L d


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Purchase return bookPosting to Ledger

Date Particulars J.F Amt Date Particulars J.

F

Amt

Jan 31 By sundries 203

Date Particulars J.F Amt Date Particulars J.F Amt

Jan 6 To Returnoutward

95

Return Outward A/c Cr.Dr.

Shyam & Co A/cDr. Cr.

Roshan A/c


Jan

27

To Return

outward

108

Cr.Dr.


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Sales Day Book:

A sales book is also known as sales daybook is a book of original entry in which allthe details of credit sales are recorded.

Total of sales book shows the total creditsales of goods during the period concerned.


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Sales Day Book:

-No Cash Sales

-No Fixed Asset Sales-No Cash Discount

Sales Day Book: Format


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Sales Day Book: Format

Date Particulars InvoiceNo

L.F Details Amt

.

.

....

A) Customer name

@Rs..

@Rs..

Less:trade discount

B) Customer name

@Rs..@Rs..

Less:trade discount

Total

Xxx

Xxx

XxxXxx

XxxXxx

Xxx

xxx

Xxx

Xxx

xxx

Sales day book Posting to Ledger


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Sales day bookPosting to Ledger

Dat

e

Particulars J.F Amt Date Particulars J.

F

Amt

By Cash A/c

By sundries

(credit purchase)

Xxx

xxx

xxx

Total Sales A/c Cr.Dr.

Customers (individual) A/cDr. Cr.

Dat

e

Particulars J.F Amt Dat

e

Particulars J.F Amt

To Sales xxx

xxx


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Sales Day Book: Illustrations

From the following transactions prepare sales book of Decoratefurniture house for May 2009 and post them to ledger:

May 5 Sold on Credit to Amrit Stationary:

10 Tables @ Rs 45

20 Chairs @ Rs 3012 Sold to IBM College:

15 chairs @ Rs 30

25 stools @ Rs 20


17 Sold to Cash to Govinda Thapa

5 Tables @ Rs 45

25 Sold old typewriter to Madan Lal

on credit for Rs 1000


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Sales Day Book of Decorate Furniture for May 2009

Date2009

Particulars Inv.no

L.F

Details

Amt

May 5

May12

A) Amrit stationary

10 table@4520 chairs@Rs30

B) IBM college

15 chairs@3025 stools@Rs20


Total

450600

450500

950

95

1050

855

1905

S l d b k P ti t L d


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Sales day bookPosting to Ledger

Date Particulars J.F Amt Date Particulars J.

F

Amt

May 17

May 31

By cash

By sundries

(credit purchase)

225

1905


May5

To Sales 1050

Total Sales A/c Cr.Dr.

Amrit Stationary A/cDr. Cr.

IBM college A/c


May

12

To Sales 855

Cr.Dr.

S l t b k


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Sales returns book

Sales returns book is also called returns

inwards book. It is used for recording goodsreturned to us by our customers.

Goods may be returned because they are

of the wrong kind or not up to sample orbecause they are damaged etc.

Credit Note:Customers who return goods should be senta credit note. It is a statement sent by abusiness to another person showing the

amount credited to the account of the later.

Sales Return Book: Format


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Sales Return Book: Format

Date Particulars Creditnote

L.F Details Amt

.

.

....

A) Customer name

@Rs..

@Rs..

Less:trade discount

B) Customer name

@Rs..@Rs..

Less:trade discount

Total

Xxx

Xxx

XxxXxx

XxxXxx

Xxx

xxx

Xxx

Xxx

xxx

Sales Return book Posting to Ledger


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Sales Return bookPosting to Ledger

Dat

e

Particulars J.F Amt Date Particulars J.

F

Amt

To sundries xxx

xxx

Return inwards A/c Cr.Dr.

Customers (individual) A/cDr. Cr.

Dat

e

Particulars J.F Amt Date Particulars J.F Amt

By Returninwards

xxx

xxx


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Sales Return Book: Illustrations


Ekta Sports Supplier.2009 Jan 12 Returned From Akash :

2 Cricket bat @ Rs 100

4 Football @ Rs 50

(Trade discount 5%)2009 Jan 25 Returned From Global college:

1 Volleyball@ Rs 40

2 Football @ Rs 50


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Sales Return Book of Ekta sports Suppliers for Jan

2009

Date2009

Particulars Inv.no

L.F

Details

Amt

jan12

Jan

25

A) Akash

2 Cricket bat@Rs 100

4 Football @ Rs 50

B) Global college

1 Volleyball@402 Football@Rs50


Total

200

200

40100

140

14

400

126

526

Sales Return book Posting to Ledger


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Sales Return bookPosting to Ledger

Date Particulars J.

F

Amt Dat

e

Particulars J.

F

Amt

Jan 312009

To sundries 526

Date

Particulars J.F


Jan 122009

By Returninwards

400

Ekta Sports Suppliers A/c Cr.Dr.

Akash A/cDr. Cr.

Global College A/c

Date

Particulars J.F


Jan 25

2009

By Return inward 126

Cr.Dr.

Purchases Day Book: Exercise


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Purchases Day Book: Exercise

prepare the purchases day book of a Wears Fashion

Shop and post it into ledger for March 2009:-2009 March 5 Purchased from Kathmandu Mahal

20 Shirts@ Rs 850 (Trade discount 10%)

24 Pants @ Rs 1300

(Trade discount 15%)2009 March 17 Purchased Furniture on credit of Rs

10,000 from wood land ltd.

2009 March 22 Purchased from R.B Complex:

10 Jackets @ Rs 1500 (Trade discount 10%)

10 Trousers @ Rs 300

2009 March 27 Purchased on cash from Suraj Arcade

10 T-shirts @ Rs 280


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Purchases Return Book: Exercise


Mr Arun & Co.:2010 Jan 6 Returned to Maheshowr & Co:

4 Chair @ Rs 500

5 Table @ Rs 400 (Trade discount 5%)

2010 Jan 27 Returned to Roshan & Co:2 Table fan @ Rs 2250

1 Heater @ Rs 2500



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Sales Day Book: Exercise

From the following transactions prepare sales book of InnovativeComputer suppliers for May 2009 and post them to ledger:

May 5 Sold on Credit to United College

5 Lenovo computer @ Rs 50,000

6 Ordinary computer@ Rs 30,00011 Sold to Cash to Mr. Bibek.

1 Laptop Compaq @ Rs 45

13 Sold to IBM College:

8 Laptop Compaq @ Rs 60,000 (Trade discount

10%)

10 Lenovo Computer @ Rs 50,000

25 Sold old Delivery Van to Mr Khan.

on credit for Rs 200,000


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Sales Return Book: Exercise


Wood land Furnishing House2009 Jan 12 Returned From Bishnu :2 Visitors Chair @ Rs 2500

1 Revolving Chair @ Rs 5000

(Trade discount 5%)2009 Jan 25 Returned From Caspian College:

5 Armed Chair @ Rs 1400

2 Officer Desk @ Rs 12500 (Trade discount 5%)

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