Hi, i wonder if i could obtain any help out there.
Here’s the question (Extracted):
Charles sold goods on credit to Cody with a list price of $3,200. He allows a 10% trade discount and a further 2% discount for payment within seven days. Cody paid within two days.
How much discount should be recorded in the Discount Allowed as a result of the above transactions?
What I had calculated was, I actually calculated the 10% disc on the Sales Price, and after lessing out the 10% disc, i calculated another 2% of further discount based on the net payable amount.
However, i was wrong as only that 2% further discount has been taken as Discount Allowed and not the 10% discount. Is it the 10% discount is supposed to be taken separately as Trade Discount, instead of taking as Discount Allowed? I thought they are the same.
Hope to have someone out there to help me unravel this..
for discount allowed or received we will take only the cash discount.
that is 3200*.1*.02
trade discount is taken as price in purchase account. we wont debit 3200 in purchase acc instead 3200*.9
Got it now. Thanks Vipin.
hi! could you answer this for me?
On june 1, 2012, Marites De Chavez Forest Products sold merchandise with a P120,000 list price.
a)Trade discount=30% credit terms: 2/10,n/30 date paid: june 8
b)Trade discount=40% credit terms: 1/10,n/30 date paid: june 15
c)Trade discount= ? credit terms: 2/10,n/30 date paid: june 11
d))Trade discount= credit terms: 1/10,n/30 date paid: june 14
e))Trade discount= credit terms: n/30 date paid: june 28
for each sales terms, determine the following:
1. the amount recorded as sale.
2.the amount of cash recieved.
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