The following information was extracted from the books of Jinka Enterprises as of 31st August...
The following information was extracted from the books of Jinka Enterprises as of 31st August 2015
15 cartoons of sweets at N 2,000 per carton.
25 cartons of milk at 4,000 per carton.
15 cartons of sugar 3,000 per carton.
17 cartons of soap at x5,000 per carton
The following payments were made:
Rent and rates
Salaries and wages
Fuel
Electricity
A cash discount of 6% and a 10% trade discount were allowed if payment was made within 7 days.
i. Calculate how much cash was paid for the goods bought if payment was made within 7 days.
ii. If all the goods were sold at a mark up of 20% determine the selling price.
iii. Calculate the value of the newt profit made.
Explanation
i. Cash paid if payment is made within 7 days:
AMOUNT TOTAL
N 25 cartons of milk at N4,000 per carton 100,000
17 cartons of soap at N5,000 per carton 85,000
5 cartons of sugar at N3,000 per carton 45,000
15 cartons of sweets at N2,000 per carton 30,000 260,000
Less 10% trade discount: 10/100 x N260,000 26,000
234,000
Less 6% cash discount: 6/100 x N234,000 14,040
Actual cash paid 219,960
ii. Selling price of the goods at a mark up of 20%
Formula: Selling Price = Cost - Trade discount + Mark up
| Items | Cost (N) | Trade discount(10% of cost) | Mark up (cost - 10%)x20% | Selling price (N) |
| sweets | 2000 | 200 | 360 | 2160 |
| milk | 4000 | 400 | 720 | 4320 |
| sugar | 3000 | 300 | 540 | 3240 |
| soap | 5000 | 500 | 900 | 5400 |
OR
Sweets 15 x N2,000 = 30,000
Milk 25 x N4,000 = 100,000
Sugar 15 x N3,000 = 45,000
Soap 17 x N5,000 = 8 5,000
260,000
Less 10% trade disc. = 26,000
234,000
+ mark up(20% 234,000) = 46,000
Sales revenue = 280,000
ii. Net profit
Gross profit 46,800
Discount received 14,040
60,840
Less
Salaries and wages 8000
Rent and rates 3500
Fuel 2000
Electricity 1500 15,000
Net proft 45,840