Question

John receives an invoice for the purchase of 40 batteries for 8,440 on 31 March 2019. Trade discounts are 5 % and 3 % and the cash discount terms are 8/10, 5/30, /60. He pays the invoice on 19 April 2019. He plans to sell the batteries by allowing 10 % of the cost for operating expenses and 28 % of the selling price for net profit.
i. Calculate the payment on 19 April 2019.
ii. Determine the selling price for each battery.

Answer 1

Answer:

John receives an invoice for the purchase of 40 batteries for 8,440 on 31 March 2019. Trade discounts are 5 % and 3 % and the cash discount terms are 8/10, 5/30, /60. He pays the invoice on 19 April 2019. He plans to sell the batteries by allowing 10 % of the cost for operating expenses and 28 % of the selling price for net profit.

i. Calculate the payment on 19 April 2019.

ii. Determine the selling price for each battery.