TUTORIAL 3.

1: TRADE & CASH DISCOUNTS

REVIEW QUESTIONS

1. May Chan’s shop received an invoice for the purchase of 80 books at RM23.50 each and 200
exercise books at RM4.50 each. The invoice was dated 7 March 2019. The shop was offered
trade discounts of 10% and 5%, and cash discount terms 4/10, 2/20 and n/30. The invoice was
paid on 16 March 2019. Find
a) a single discount that is equivalent to the given trade discounts. (14.5%)
b) the amount of payment made on 16 March 2019. (RM2,281.82)

2. An invoice dated 10 May 2019 for RM8,200 inclusive of handling charges of RM70 was offered
trade discount of 9% and 5%, and cash discount terms of 8/10, 3/20 and n/30. Find
a) the net price after trade discount. (RM7,098.39)
b) the amount paid on 23 May 2019. (RM6,887.54)

3. The list price of a digital camera is RM1,500. After deducting a trade discount of 10% and y%,
the net price is RM1,250. Find
a) The value of y. (7.407%)
b) The single equivalent discount rate (16.67%)

4. A bill of RM2,500 including a handling charge of RM100 is offered a trade discount of 20%.
What is the payment to settle the invoice? (RM2,020)

5. An invoice of RM2,500 dated 20 February 2019 has cash discount terms of 5/10, n/30.
a) What is the last day to pay in order to receive the 5% cash discount? (2 March 2019)
b) Find the net payment if the invoice was settled on 1 March 2019. (RM2,375)

6. Zaki received an invoice of RM1,280 with cash discount terms of 10/5, 6/10, n/30. If he paid
the invoice three days after the date of the invoice, what is the payment amount? (RM1,152)

7. On 28 April 2019, a retailer received an invoice and the list prices of the goods bought are as
follows.
Drink RM460.00
Frozen Food RM230.00
Equipment RM780.00
Transportation fee was RM90. The trade discounts given were 10%, 5% and the cash discount
terms were 4/7, 3/15, n/30.
a) Calculate the single trade discount that is equivalent to the trade discounts given. (14.5%)
b) Find the total payment if the retailer decides to settle the invoice on 10 May 2019.
(RM1,219.14)

8. An invoice of RM6,000 which includes a freight cost of RM80, gives cash discount terms of
2/10, n/30. Find the amount to be paid within the cash discount period. (RM5,881.60)

9. An invoice dated 20 June 2019 for RM8,500, inclusive of insurance charges of RM40, was
offered trade discounts of 8%, 3% and cash discount terms of 5/10, 2/30 and n/60. Find
 a) the net price after the trade discounts. (RM7,589.70)
b) the amount paid on 28 June 2019. (RM7,212.22)

10. The net price of a product after allowing trade discounts of 25% and 15% was RM720. Find
a) the list price of the product. (RM1,129.41)
b) the amount to be paid if the invoice with cash terms 3/5, n/30 was paid four days after the
date of the invoice. (RM698.40)