Question

In August 1 purchased goods of rs. 90000 at 10% trade discount and 10 % cash discount from Rakesh and 1/3 rd amount received by cheque

Answer 1

Answer:

If you purchased good for 90,000 (your local currency) with trade discount of 10%.

10% of 90,000 = 9,000

You were liable to pay 81,000 i.e. 90,000 less 9,000.

If you paid third of the amount due by cheque, this equal to 81,000/3 = 27,000

This left 54,000 payable by cash. You got 10% cash discount.

10% of 54,000 = 5,400.

Actual cash you paid was 54,000 less 5,400 = 48,600.

Having got the figure for each part, the following journal entries will be passed

Debit Purchases Account with 90,000

Credit Cash Account with 48,600

Credit Bank Account with 27,000

Credit Discount Received Account with 9,000

Credit Discount Received Account with 5,400

Answer 2

Explanation:

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