Question

goods purchased from M/s neel kamal at a list price of rs 12000 at 10% trade discount and 3% cash discount . cash was paid upto 80% of the amount

Answer 1

List Price = Rs.12,000

Trade Discount = 10%( Rs.12,000)=

Rs.1200

Agreed Price = Rs Rs.12,000 - Rs.1200

Rs.10,800

Cash paid immediately = 80%(10,800) = Rs.8,640- Rs.260 = Rs.8380

Cash Discount = 3%( Rs.8,640)

Rs.260

Journal Entry:

Purchases A/C. Dr. Rs.10,800

To Cash Discount Rs.260

To Cash A/C. Dr. Rs.8380

To Neel Kamal A/C. Rs.2160

(Being goods purchased from Neel Kamal)