Calculation of Selling Price

Calculation of Discount
- Trade discount % = 8%
- List price = Rs 15,000
- Discount = Trade discount % * List price
- Discount = 8/100 * 15000 = Rs 1200

Calculation of Selling Price
- Selling price = List price - Discount
- Selling price = 15000 - 1200 = Rs 13,800

Explanation of Trade Discount

Trade discount is a discount given by the seller to the buyer on the list price of goods. It is given to encourage bulk purchases and to maintain a good relationship between the buyer and seller. It is not recorded in the books of accounts as it is not considered a part of the selling price. The trade discount is usually given as a percentage of the list price.

In this case, the list price of the goods is Rs 15,000 and the trade discount is 8%. Therefore, the discount given is Rs 1200. The selling price of the goods is calculated by subtracting the discount from the list price. The selling price of the goods is Rs 13,800.

Conclusion

In conclusion, the trade discount is a common practice in business transactions. It is given to encourage bulk purchases and to maintain a good relationship between the buyer and seller. In this case, the goods with a list price of Rs 15,000 were sold at a trade discount of 8%, resulting in a selling price of Rs 13,800.