Question 7
Musa Ventures bought the following items on 2nd March 2015:
10 Generator sets at N10,000 each;
20 Blender machines at N5,000 each;
15 Washing machines at N20,000 each.
She was granted 5% trade discount and 4% cash discount if she paid within 7 days.
Calculate the following:
Observation
Most candidates avoided this question and those that attempted it did poorly.
The responses expected from candidates are:
7. Solution
(a) Total cost of the product Amount
10 Generator sets at N10,000 each (10 x N10,000) = N100,000
20 Blender machine at N5,000 (20 x N5,000) = N100,000
15 Washing machines at N20,000 (15 x N20,000) = N300,000
N500,000
(b) Trade Discount:
Trade discount of 5% on N500,000
5 x N500,000 = N25,000
100 1
(c) Cash discount
Cash discount received = 4% (N500,000 – N25,000)
4% of N475,00 = 4 x N475,000 = N19,00
100 1
(d) Amount paid for the goods:
Total cost of the goods N500,000
Less: Trade discount allowed: N25,000
Cash discount received N19,000 N44,000
N456,000