I am a local constructor and I build small buildings in my locality. In recent times, I received a contract for extension of a school building. I have used a total of 9 lakhs from my bank account in cash. Out of that I have used 5 lakhs (using cheques) to purchase materials. But the problem is that I withdrew the remaining 4 lakhs for making payments to the labourers in cash.
I have two questions:
How do I prove the payment made to labourers? I have paid Rs 4 lakhs in 3 months to more than a 100 labourers, and I haven't paid anyone more than Rs 10000 in a day. I have a blunt list of who I paid the amount to but I don't think it enough evidence. Please advice.
What journal entry should I pass in my books(Tally) in this process?
Jan. 08, 2018