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Sold goods to y costing 10000 at 20% profit on cost less 10 %trade discount.?
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Sold goods to y costing 10000 at 20% profit on cost less 10 %trade dis...
Journals relating to Discount :-
Discount is a privilege/facility offer to the buyer in order to promote sales.
Discount is of two types :-
1. Cash Discount is an allowance given by the creditor to debtor for prompt or early payment of cash against his dues from the debtor.
2.Trade Discount is allowed by manufacturers or wholesalers to retailers and traders so as to encourage them to buy goods in bulky quantities. Such discounts is given to Promote sale or to attract more customers.
ANALYSIS OF THE TRANSACTION :
Accounts Affected.
1. Purchases A/c
2. Cash A/c
3. Discount Received A/c
Nature of Accounts.
1. Purchases A/c is Nominal in nature So, It will debited as per rule of nominal account “Debit all Expenses”.
2. Cash A/c is a Real in nature, and hence will be credited, According to the rule of Real account “Credit what comes out”.
3. Discount Received A/c is always credited, as it is an income which is earned or received form creditors on making prompt payment to them.So, the Journal Entry For the above transaction is :-
purchase A/c. Dr ... 8000
To cash A/c. 7,600
To Discount Received A/c. 400
(Being Goods purchased and Discount Received)
WORKING NOTES :
Given, purchased goods worth Rs. 10,000 less 20% trade discount and 5% cash discount. The net Amount will be calculated as under :
List price of Goods = 10,000
Trade Discount @ 20%
= Rs.10,000 � 20/100
= 2,000
∴ Net Amount of the bill
= 10,000 - 2,000
= 8,000
Cash Discount @ 10℅
Rs. 8,000 � 10/100
= 800
∴ Net Payment made
= 8,000 - 800
= 7200
Hope this helps!
This question is part of UPSC exam. View all Commerce courses
Most Upvoted Answer
Sold goods to y costing 10000 at 20% profit on cost less 10 %trade dis...
Calculation of Profit on Cost:
To calculate the profit on cost, we need to determine the cost price of the goods. In this case, the cost price is given as 10000.
Profit on cost = Profit percentage on cost × Cost price
The profit percentage on cost is given as 20%. Therefore,
Profit on cost = 20% × 10000 = 0.2 × 10000 = 2000
Calculation of Selling Price:
To calculate the selling price, we need to add the profit on cost to the cost price.
Selling price = Cost price + Profit on cost
Selling price = 10000 + 2000 = 12000
Calculation of Trade Discount:
The trade discount is given as 10%. To calculate the trade discount, we need to multiply the selling price by the trade discount percentage.
Trade discount = Trade discount percentage × Selling price
Trade discount = 10% × 12000 = 0.1 × 12000 = 1200
Final Calculation:
To calculate the amount received after the trade discount, we need to subtract the trade discount from the selling price.
Amount received = Selling price - Trade discount
Amount received = 12000 - 1200 = 10800
Summary:
- The goods were sold to customer Y at a cost price of 10000.
- A 20% profit on cost was added to the cost price, resulting in a profit of 2000.
- The selling price was calculated by adding the profit on cost to the cost price, resulting in a selling price of 12000.
- A trade discount of 10% was applied to the selling price, resulting in a discount of 1200.
- The final amount received from customer Y after the trade discount was 10800.
To calculate the profit on cost, we need to determine the cost price of the goods. In this case, the cost price is given as 10000.
Profit on cost = Profit percentage on cost × Cost price
The profit percentage on cost is given as 20%. Therefore,
Profit on cost = 20% × 10000 = 0.2 × 10000 = 2000
Calculation of Selling Price:
To calculate the selling price, we need to add the profit on cost to the cost price.
Selling price = Cost price + Profit on cost
Selling price = 10000 + 2000 = 12000
Calculation of Trade Discount:
The trade discount is given as 10%. To calculate the trade discount, we need to multiply the selling price by the trade discount percentage.
Trade discount = Trade discount percentage × Selling price
Trade discount = 10% × 12000 = 0.1 × 12000 = 1200
Final Calculation:
To calculate the amount received after the trade discount, we need to subtract the trade discount from the selling price.
Amount received = Selling price - Trade discount
Amount received = 12000 - 1200 = 10800
Summary:
- The goods were sold to customer Y at a cost price of 10000.
- A 20% profit on cost was added to the cost price, resulting in a profit of 2000.
- The selling price was calculated by adding the profit on cost to the cost price, resulting in a selling price of 12000.
- A trade discount of 10% was applied to the selling price, resulting in a discount of 1200.
- The final amount received from customer Y after the trade discount was 10800.
Community Answer
Sold goods to y costing 10000 at 20% profit on cost less 10 %trade dis...
Ans is 11700.
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Sold goods to y costing 10000 at 20% profit on cost less 10 %trade discount.? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Sold goods to y costing 10000 at 20% profit on cost less 10 %trade discount.? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Sold goods to y costing 10000 at 20% profit on cost less 10 %trade discount.?.
Sold goods to y costing 10000 at 20% profit on cost less 10 %trade discount.? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Sold goods to y costing 10000 at 20% profit on cost less 10 %trade discount.? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Sold goods to y costing 10000 at 20% profit on cost less 10 %trade discount.?.
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