Question

purchase goods of rs.2,00,000 at 10%trade discount and 2% cash discount half paymentade in cash​

Answer 1

Answer:

The following is the journal entry:

Purchases A/c. Dr. 180000

To Discount. A/c. 3600

To Cash A/c. 88200

To Supplier A/c. 88200

Explanation:

Trade discount shouldn't be accounted as discount rather directly adjusted in the purchase value;

Here in the given case, trade discount amounts to ₹20,000 being 10% of ₹2,00,000(the purchase value)

Net purchase value is ₹180,000 (₹200,000- ₹20,000 i.e, purchases less trade discount)

Cash discount = 2% of net purchases

= 2% of ₹180,000

=₹3,600

So net purchase value in total= ₹180,000 - ₹3,600(cash discount)

=₹176,400