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

1. E and O.E.      Errors and Omissions Excepted

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            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