EXERCISES 2– MERCHANDISING BUSINESS PART II

GENERAL INSTRUCTIONS:
Problems 1 – 3: Please fill up the missing amount – answer the amount of the account with
“P ?” only.
Problem 4: You are required to answer the questions given.

PROBLEM NO. 1: Supply the missing amount:

GROSS SALES SALES SALES RETURNS & NET SALES

DISCOUNTS ALLOWANCES

P500,000.00 3% P0 P?

P? P0 20% P120,000.00

P320,500.00 P0 P? 90%

P175,250.00 2% 5% P?

PROBLEM NO. 2: Supply the missing amount:

LIST PRICE TRADE DISCOUNT INVOICE PRICE CASH DISCOUNT NET SALES
P? 10% P90,000.00 2% P?
P150,000.00 P? 80% P? P120,000.00
P75,000.00 20% P? P600.00 P?
P? 25% P? P0 P 15,000.00

PROBLEM NO. 3: Compute the Invoice Price using the best Trade Discount (for the favor of the Seller):

LIST PRICE TRADE TRADE INVOICE PRICE

DISCOUNT (1) DISCOUNT (2)

P25,000.00 6% 3%-3% P?

P150,000.00 5%-2%-1% 1%-2%-5% P?

P75,500.00 4%-2% 5% P?

P90,000.00 10% 4%-4%-2% P?

P66,600.00 20% 12%-10% P?

PROBLEM NO. 4: Answer the following questions:

Juan purchased 25 kilos scrapped clothes for his business at P150.00/kilo. He was entitled to the promo of
trade discount of 20%. As a loyal customer he was given a credit term of 2/10, 0/15.

On the same day, Mary purchased the same items at the same selling price. But being a new customer she
was given a trade discount of 15% and a credit term of 1/10. 0/15.

Question 1: How much was the total Accounts Receivable of the Seller for the two transactions?

Question 2: If both clients were able to pay their accounts in full during the discount period, how much is
the total collection of the Seller for these accounts?

Question 3: If the two (2) customers paid their accounts in full at the end of their credit terms, how much is
the total collection of the Seller for these accounts?