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...
Question 1 Report
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.
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