One of the purchases invoices of Mr.Dauda showed D96,240 less 12 \(\frac{1}{2}\)% trade discount and cash discount of 20%. Since Mr Dauda paid the amount du...

One of the purchases invoices of Mr.Dauda showed D96,240 less 12 \(\frac{1}{2}\)% trade discount and cash discount of 20%. Since Mr Dauda paid the amount due within the credit period, the amount paid is

Answer Details

The purchase invoice shows a total of D96,240 with a trade discount of 12\(\frac{1}{2}\)% and a cash discount of 20%. This means that the buyer, Mr. Dauda, is entitled to a discount of 12\(\frac{1}{2}\)% of D96,240, which is: 12.5/100 x D96,240 = D12,030 The net amount due after subtracting the trade discount is: D96,240 - D12,030 = D84,210 Next, Mr. Dauda is entitled to a cash discount of 20% if he pays within the credit period. The cash discount on D84,210 is: 20/100 x D84,210 = D16,842 The amount paid by Mr. Dauda will be the net amount due minus the cash discount. Therefore, the amount paid by Mr. Dauda is: D84,210 - D16,842 = D67,368 Hence, the correct answer is D67,368.