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A retailer bought 10 mowing machines at rm888 each.He was offered trade discount of 10%,5% and the credit terms were 4/10,n/30.He also had to pay rm60 for transportation costs.Later,he sold these machines with a markup of 30% on selling price.For each machine,the net profit obtained was rm95.Find the total payment made for all the machines ten days from the date of the invoice.
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provision for discount received
Cash discount is the discount in amount in accounts payable while trade discount is on sales price discount which is not recorded in business books and transaction is recorded at discount price.
Price paid after the discount is subtracted is called the discount price. This is also commonly referred to as the net price.