Question

Sold goods to xyz costing 50000 at 40 % profit and 10% trade dicount and 5% cash discount xyz paid full amount by cheque and avail cash discount

Answer 1

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

Answer 2

Explanation:

sold goods to brij &co.costing rs 50000at 40%profit, allowing 10%trade discount and 5% cash discount .brij&co.paid the full amount by cheque and availed cash discount