Given:If Emeka Enterprises settles its suppliers for goods purchased within 7 days, it can earn a cash discount of 12 and half percent. Assuming #22,800 wor...
Question 1 Report
Given:If Emeka Enterprises settles its suppliers for goods purchased within 7 days, it can earn a cash discount of 12 and half percent. Assuming #22,800 worth of goods were purchased and settled within 5 days, what will be the amount to be credited in the cash column of the company's cash book?
Answer Details
To determine the amount to be credited in the company's cash book, we need to calculate the cash discount that Emeka Enterprises will receive for settling its suppliers within 5 days.
The cash discount is 12.5% of the amount of goods purchased, which is #22,800. To calculate 12.5% of #22,800, we simply multiply #22,800 by 0.125:
#22,800 * 0.125 = #2,850
So the cash discount is #2,850.
Next, we subtract this amount from the original cost of the goods to get the final amount that will be credited in the company's cash book:
#22,800 - #2,850 = #19,950
Therefore, the amount to be credited in the company's cash book is #19,950.
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