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Purchased goods worth RS:5000 less 20% trade discount and 5% cash discount.?
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Calculation of Purchased Goods with Trade and Cash Discount
When goods are purchased, there are various discounts that are offered by the seller. The two most common types of discounts are trade discount and cash discount. Let's understand how to calculate the purchased goods with trade and cash discount with the help of the following example:
Example: A customer purchased goods worth Rs. 5000 from a seller. The seller offered a 20% trade discount and a 5% cash discount. Calculate the net amount payable by the customer.
Calculation of Trade Discount
The trade discount is offered by the seller to the customer as a reduction in the list price of the goods. The trade discount is given to encourage the customer to purchase goods in bulk and to maintain good business relations with the customer. Let's calculate the trade discount in the given example:
Trade Discount = List Price x Rate of Discount
Trade Discount = 5000 x 20/100
Trade Discount = 1000
Therefore, the trade discount offered by the seller is Rs. 1000.
Calculation of Net Price
The net price is the price that the customer pays after deducting the trade discount from the list price. Let's calculate the net price in the given example:
Net Price = List Price - Trade Discount
Net Price = 5000 - 1000
Net Price = 4000
Therefore, the net price of the goods is Rs. 4000.
Calculation of Cash Discount
The cash discount is offered by the seller to the customer as a reduction in the net price of the goods. The cash discount is given to encourage the customer to make prompt payment and to maintain good business relations with the customer. Let's calculate the cash discount in the given example:
Cash Discount = Net Price x Rate of Discount
Cash Discount = 4000 x 5/100
Cash Discount = 200
Therefore, the cash discount offered by the seller is Rs. 200.
Calculation of Amount Payable
The amount payable is the final price that the customer pays after deducting both the trade and cash discounts from the list price. Let's calculate the amount payable in the given example:
Amount Payable = Net Price - Cash Discount
Amount Payable = 4000 - 200
Amount Payable = 3800
Therefore, the amount payable by the customer is Rs. 3800.
Conclusion
The calculation of the purchased goods with trade and cash discount helps in determining the final amount payable by the customer. It is important for both the seller and the customer to understand the concept of trade and cash discount to maintain good business relations and to ensure prompt payment and bulk purchase of goods.
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Purchased goods worth RS:5000 less 20% trade discount and 5% cash discount.?
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Purchased goods worth RS:5000 less 20% trade discount and 5% cash discount.? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Purchased goods worth RS:5000 less 20% trade discount and 5% cash discount.? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Purchased goods worth RS:5000 less 20% trade discount and 5% cash discount.?.
Purchased goods worth RS:5000 less 20% trade discount and 5% cash discount.? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Purchased goods worth RS:5000 less 20% trade discount and 5% cash discount.? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Purchased goods worth RS:5000 less 20% trade discount and 5% cash discount.?.
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