Question

Sold goods to Vishal traders costing 40000 at 25%profit allowing 10%trade discount and 2%cash discount received 60%payment immediately

Answer 1

Answer:

cost = 40,000

profit=10,000

sales value (40,000+10,000)= 50,000

trade discount is to be calculated on sales value. i.e. 50,000*10%= 5,000

net invoice value is rs.45,000

then

less cash discount at 2% on 27,000 that workout to 540

then net amount paid by Vishal traders immediately is Rs. 26,460

Journal entry

(i) Vishal traders a/c   Dr.    45,000

       To Sales a/c                             45,000

(Being goods sold on credit)

(ii) Cash  a/c        Dr.                26,460

    Discount  a/c  Dr.                     540

         To Vishal traders                       27,000

(Being 60% of due amount received by giving 2% discount)

and payable is balancing figure.

Explanation: