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QUESTION :
zahra’s budget sales for the following months are :
$
AUGUST 2017 110000
SEPTEMBER 2017 120000
OCTOBER 2017 100000
NOVEMBER 2017 140000
DECEMBER 2017 18000040% of her customers pay in cash at the time of sale and receive a trade discount of 2%
30% of her customers pay one month after the sale and receive a cash discount of 1%
30% of her customers pay two months after the sale and do not receive any discount.SIR IAM CONFUSED BETWEEN TRADE DISCOUNT AND CASH DISCOUNT .
CAN U EXPLAIN THIS QUESTIONYou have not said what the question wants.
The distinction between trade discount and cash discount is irrelevant here – the customer simply pays less than the amount.
For Augusts sales, the cash will be received as follows:
In August: 40% x 110,000 = 44,000 less 2% = 43,120
In September: 30% x 110,000 = 33,000 less 1% = 32,670
In October: 30% x 110,000 = 33,000It is a similar pattern for each of the following months.
Have you watched my free lectures on budgeting? The lectures are a complete free course and cover everything needed to be able to pass the exam well.
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