Question

Question 17.
M/s. Vaish Traders, Delhi purchased 500 Parker Pens @ ₹ 200 each less Trade Discount @ 15% from Luxor Pens Ltd., Delhi. CGST and SGST was levied @ 6% each. Further, Cash Discount was allowed @ 5% as the payment was made within specified time. What will be the amount of trade discount and cash discount ?

Answer 1

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Answer 2

Trade Discount should be Rs.15,000.

Cash Discount should be Rs.4,760.

Explanation:

Calculation of Trade discount and Cash discount

Total amount of purchases = $500 \times Rs.200$

                                             = Rs.1,00,000

Trade discount @15%       = $Rs.1,00,000 \times 15 \%$

                                          = Rs.15,000

Purchase amount after Trade discount = Rs.85,000

Add: CGST @6%                                         Rs.5,100

        SGST @6%                                          Rs.5,100

                                                                                       

                                                                     Rs.95,200

                                                                                             

Purchases after adding GST        = Rs.95,200

Cash Discount @5% = $95,200 \times 5\%$

                                  = Rs.4,760

Therefore,Amount of Trade discount is Rs.15,000 and Cash discount is Rs.4,760.

*Trade discount is calculated on Gross purchase amount before charging GST.

*Cash discount is calculated on Purchase amount including GST amount.