Goods costing rs300000 purchase from rakesh at 10% trade discount and 5% cash discount
Answers
First you have to calculate the cost of good minus the trade discount
cost = 90000
(-) t.d = 9000 (10%)
total = 81000
second you have find out out the amount that has been paid
cost = 81000
1/3rd of 81000 = 81000 * 1/3
= 27000
third then you have to minus the cash discount from the amount that has been paid
cost = 27000
(-) c.d = 2700 (10%)
total = 24300
therefore , the invoice price of good is 81000.
the amount paid by cheque is 24300 and the discount received by us 2700.
the journal entry will be as follows :
Purchase A/c .......Dr 27000
To Bank A/c 24300
To Discount Received A/c 2700
(Being good purchased at 10% t.d,
paid 1/3rd amt by cheque and availed
c.d 10% )