M/s. Auto Help, Delhi purchased 500 pieces of motor cycle horns at ₹ 100 each plus IGST @ 12% from M/s G.S., Auto, Ghaziabad, (UP). Trade terms settled were: Trade Discount will be allowed @ 10% and Cash Discount @ 5% if payment is made within 7 days. M/s. Auto Help made the payment after 30 days. Determine the amount of Trade Discount and Cash Discount.

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Solution

List Price (500×100)
50,000

Less: Trade Discount @ 10%
5,000

Value of Goods
45,000

Note: No cash discount will be allowed as the payment is received after the stipulated time period of 7 days.

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10, 000

500

5 %

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