Question 8
You are required to calculate the:
Observation
Many candidates did not attempt this question. The once that did performed well in part a. but failed part b.
The expected responses are:
8a. (i) C.O.D. Cash on Delivery
(ii) C.I.F. Cost, Insurance and Freight
(iii) F.O.B. Free on Board
- E and O.E. Errors and Omissions Excepted
237
8b. (i) Calculation of Trade Discount:
5% of Cost of goods = 5/100 x 100,000/1
= Le 5,000
(ii) Calculation of Cash Discount:
Cash payable = Le 100,000 – Le 5,000 = Le 95,000
Cash Discount (5%) = 5/100 x 95,000/1
= Le 4,750
(iii) Calculation of Net amount payable:
Cost of goods Le 100,000
Less trade discount Le 5,000
Gross amount payable Le 95,000
Less cash discount Le 4,750
Net amount payable Le 90,250