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Anil purchased, 1,000 gel roller pens at Rs.50 each less 20% trade discount and 3% cash discount if payment is made within 30 days . Anil paid Rs.10,000 within 30 days and balance amount after 30 days period .Purchases account will be debited and discount received account will be credited respectively with?
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Anil purchased, 1,000 gel roller pens at Rs.50 each less 20% trade dis...
Calculation of Trade Discount and Cash Discount:

  • Number of gel roller pens purchased = 1,000

  • Cost of each pen = Rs.50

  • Total cost of 1,000 pens = 1,000 x Rs.50 = Rs.50,000

  • Trade discount = 20%

  • Trade discount amount = Rs.50,000 x 20% = Rs.10,000

  • Amount after trade discount = Rs.50,000 - Rs.10,000 = Rs.40,000

  • Cash discount = 3%

  • Cash discount amount = Rs.40,000 x 3% = Rs.1,200

  • Amount payable after cash discount = Rs.40,000 - Rs.1,200 = Rs.38,800



Journal Entry:

  • Purchases account will be debited with Rs.50,000 (total cost of pens)

  • Discount received account will be credited with Rs.11,200 (trade discount + cash discount)



Payment:

  • Anil paid Rs.10,000 within 30 days, which means he is eligible for the cash discount of 3%

  • Amount payable after cash discount = Rs.38,800

  • Balance amount to be paid after 30 days = Rs.38,800 - Rs.10,000 = Rs.28,800



Therefore, the journal entry would be:

  • Cash account will be debited with Rs.10,000 (amount paid within 30 days)

  • Discount received account will be debited with Rs.1,200 (cash discount amount)

  • Accounts payable account will be credited with Rs.38,800 (amount payable after cash discount)



After 30 days, the balance amount of Rs.28,800 will be paid and the following journal entry will be passed:

  • Accounts payable account will be debited with Rs.28,800

  • Cash account will be credited with Rs.28,800

Community Answer
Anil purchased, 1,000 gel roller pens at Rs.50 each less 20% trade dis...
40,000,nil in
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Anil purchased, 1,000 gel roller pens at Rs.50 each less 20% trade discount and 3% cash discount if payment is made within 30 days . Anil paid Rs.10,000 within 30 days and balance amount after 30 days period .Purchases account will be debited and discount received account will be credited respectively with?
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Anil purchased, 1,000 gel roller pens at Rs.50 each less 20% trade discount and 3% cash discount if payment is made within 30 days . Anil paid Rs.10,000 within 30 days and balance amount after 30 days period .Purchases account will be debited and discount received account will be credited respectively with? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Anil purchased, 1,000 gel roller pens at Rs.50 each less 20% trade discount and 3% cash discount if payment is made within 30 days . Anil paid Rs.10,000 within 30 days and balance amount after 30 days period .Purchases account will be debited and discount received account will be credited respectively with? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Anil purchased, 1,000 gel roller pens at Rs.50 each less 20% trade discount and 3% cash discount if payment is made within 30 days . Anil paid Rs.10,000 within 30 days and balance amount after 30 days period .Purchases account will be debited and discount received account will be credited respectively with?.
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