Question

Sold good to brij and vo.costing 50000at 40%profit,allowing 10%trade discount and 5%cash discount . Paid full amount by cheque and availed cash discount

Answer 1

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eswarsai33

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Cost of goods = 50000

Profit = 40% of cost

= 50000*40%

= 20000

sale price = 50000 + 20000 = 70000

Trade Discount = 10% of 70000

Note that trade discount is always applied on sale price.

Sale value = Sale price - trade discount

= 70000 - 7000

= 63000

Cash received = Sale value - cash discount

Note that cash discount is always computed on cash paid.

In the given case the entire amount is paid. so cash discount is computed on sale value.

Cash received = 63000 - 63000*5%

= 63000 - 3150

= 59850