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2016 2016 Jan. 1 X had the following balances Cash 5,000; Loan from Mrs. X 3000, Bank loan? 5,000; Machinery 10,000 and Furniture 3000, Salary outstanding 500. Jan. 2 Purchased from K goods of the list price of 1,000 subject to 15% trade discount.?
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2016 2016 Jan. 1 X had the following balances Cash 5,000; Loan from Mr...
Explanation:
Initial Balances:
- Cash: $5,000
- Loan from Mrs. X: $3,000
- Bank loan: $5,000
- Machinery: $10,000
- Furniture: $3,000
- Salary outstanding: $500
Jan. 2 Transaction:
- Purchased goods from K with a list price of $1,000
- Trade discount of 15% applied
Trade Discount:
- A trade discount is a reduction in the list price of goods or services offered by the supplier to the customer.
- It is usually provided as an incentive to encourage the customer to make a purchase.
- In this case, the goods purchased from K had a list price of $1,000, and a 15% trade discount was applied.
Calculation:
- To calculate the trade discount, we multiply the list price by the discount rate.
- Trade discount = List price * Discount rate
- Trade discount = $1,000 * 15% = $150
Adjusted Purchase Price:
- The trade discount is deducted from the list price to determine the adjusted purchase price.
- Adjusted purchase price = List price - Trade discount
- Adjusted purchase price = $1,000 - $150 = $850
Impact on Balances:
- The purchase of goods affects the following balances:
- Inventory: Increase by $850 (adjusted purchase price)
- Cash: Decrease by $850 (payment for goods)
Updated Balances:
- Cash: $5,000 - $850 = $4,150
- Loan from Mrs. X: $3,000
- Bank loan: $5,000
- Machinery: $10,000
- Furniture: $3,000
- Salary outstanding: $500
- Inventory: $850
Summary:
- The purchase of goods from K with a list price of $1,000 and a trade discount of 15% resulted in an adjusted purchase price of $850.
- The cash balance decreased by $850, and the inventory balance increased by $850.
Initial Balances:
- Cash: $5,000
- Loan from Mrs. X: $3,000
- Bank loan: $5,000
- Machinery: $10,000
- Furniture: $3,000
- Salary outstanding: $500
Jan. 2 Transaction:
- Purchased goods from K with a list price of $1,000
- Trade discount of 15% applied
Trade Discount:
- A trade discount is a reduction in the list price of goods or services offered by the supplier to the customer.
- It is usually provided as an incentive to encourage the customer to make a purchase.
- In this case, the goods purchased from K had a list price of $1,000, and a 15% trade discount was applied.
Calculation:
- To calculate the trade discount, we multiply the list price by the discount rate.
- Trade discount = List price * Discount rate
- Trade discount = $1,000 * 15% = $150
Adjusted Purchase Price:
- The trade discount is deducted from the list price to determine the adjusted purchase price.
- Adjusted purchase price = List price - Trade discount
- Adjusted purchase price = $1,000 - $150 = $850
Impact on Balances:
- The purchase of goods affects the following balances:
- Inventory: Increase by $850 (adjusted purchase price)
- Cash: Decrease by $850 (payment for goods)
Updated Balances:
- Cash: $5,000 - $850 = $4,150
- Loan from Mrs. X: $3,000
- Bank loan: $5,000
- Machinery: $10,000
- Furniture: $3,000
- Salary outstanding: $500
- Inventory: $850
Summary:
- The purchase of goods from K with a list price of $1,000 and a trade discount of 15% resulted in an adjusted purchase price of $850.
- The cash balance decreased by $850, and the inventory balance increased by $850.
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2016 2016 Jan. 1 X had the following balances Cash 5,000; Loan from Mrs. X 3000, Bank loan? 5,000; Machinery 10,000 and Furniture 3000, Salary outstanding 500. Jan. 2 Purchased from K goods of the list price of 1,000 subject to 15% trade discount.?
Question Description
2016 2016 Jan. 1 X had the following balances Cash 5,000; Loan from Mrs. X 3000, Bank loan? 5,000; Machinery 10,000 and Furniture 3000, Salary outstanding 500. Jan. 2 Purchased from K goods of the list price of 1,000 subject to 15% trade discount.? for Class 3 2024 is part of Class 3 preparation. The Question and answers have been prepared according to the Class 3 exam syllabus. Information about 2016 2016 Jan. 1 X had the following balances Cash 5,000; Loan from Mrs. X 3000, Bank loan? 5,000; Machinery 10,000 and Furniture 3000, Salary outstanding 500. Jan. 2 Purchased from K goods of the list price of 1,000 subject to 15% trade discount.? covers all topics & solutions for Class 3 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for 2016 2016 Jan. 1 X had the following balances Cash 5,000; Loan from Mrs. X 3000, Bank loan? 5,000; Machinery 10,000 and Furniture 3000, Salary outstanding 500. Jan. 2 Purchased from K goods of the list price of 1,000 subject to 15% trade discount.?.
2016 2016 Jan. 1 X had the following balances Cash 5,000; Loan from Mrs. X 3000, Bank loan? 5,000; Machinery 10,000 and Furniture 3000, Salary outstanding 500. Jan. 2 Purchased from K goods of the list price of 1,000 subject to 15% trade discount.? for Class 3 2024 is part of Class 3 preparation. The Question and answers have been prepared according to the Class 3 exam syllabus. Information about 2016 2016 Jan. 1 X had the following balances Cash 5,000; Loan from Mrs. X 3000, Bank loan? 5,000; Machinery 10,000 and Furniture 3000, Salary outstanding 500. Jan. 2 Purchased from K goods of the list price of 1,000 subject to 15% trade discount.? covers all topics & solutions for Class 3 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for 2016 2016 Jan. 1 X had the following balances Cash 5,000; Loan from Mrs. X 3000, Bank loan? 5,000; Machinery 10,000 and Furniture 3000, Salary outstanding 500. Jan. 2 Purchased from K goods of the list price of 1,000 subject to 15% trade discount.?.
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2016 2016 Jan. 1 X had the following balances Cash 5,000; Loan from Mrs. X 3000, Bank loan? 5,000; Machinery 10,000 and Furniture 3000, Salary outstanding 500. Jan. 2 Purchased from K goods of the list price of 1,000 subject to 15% trade discount.?, a detailed solution for 2016 2016 Jan. 1 X had the following balances Cash 5,000; Loan from Mrs. X 3000, Bank loan? 5,000; Machinery 10,000 and Furniture 3000, Salary outstanding 500. Jan. 2 Purchased from K goods of the list price of 1,000 subject to 15% trade discount.? has been provided alongside types of 2016 2016 Jan. 1 X had the following balances Cash 5,000; Loan from Mrs. X 3000, Bank loan? 5,000; Machinery 10,000 and Furniture 3000, Salary outstanding 500. Jan. 2 Purchased from K goods of the list price of 1,000 subject to 15% trade discount.? theory, EduRev gives you an
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