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Hi everyone)These days i am studying FA1 from kaplan.I have noticed there were some mistakes in this book published by kaplan and i think the problem i am going to write below is also another mistake by kaplan.
Question:-
A credit note has to be prepared for tab design,for sales returns.On the original invoice.Tab design was offered a settlement discount of 4%.The amount of the credit note is $28.30 before sales tax at 17.5%.What should be the total value of the credit note?
Answer given by kaplan :-
Credit note subtotal =$28.30
Sales tax ($28.30*0.96)*17.5%=4.75
Credit Note Total=$33.05
I personally believe the answer is $31.91 not $33.05 .If i am wrong please let me know how and why i am wrong.
RegardsYou’re right in your calculation, But you’ve ignored the fact that question asks for the Credit Note Total, not the amount that Tab Design will have to pay if it avails the Settlement discount. Its sort of an offer.
If Tab Design goes for the discount, then they’ll pay:
27.168 + 4.75 = 31.91
If not, then they’ll pay:
28.31 + 4.75 = 33.06 (which should be & IS the total of Credit Note)
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