Discount Numericals

Practice Question No. 1:

Mr. Ali sold goods on credit to Mr. Ahmad of the catalog or list price of Rs. 10,000 at a Trade
Discount of 10%. Calculate the invoice price.
Mr. Ahmad received an invoice on 20th November, 2021 with terms [2/10, n/30]. He paid the
whole amount on 29th November 2021. How much Mr. Ahmad did effectively pay for the bill?
Requirement:
1- Calculate the invoice price.
2- How much Mr. Ahmad did effectively pay for the bill on 29th November, 2021?

Answer of Requirement 1- (Calculation of invoice price)

Trade Discount = List Price x Discount rate
Trade Discount = Rs. 10,000 x 10/100
Trade Discount = 1,000
Invoice Price = List Price-Trade Discount
Invoice Price = 10,000 – 1,000
Invoice Price = 9,000
So, the Invoice Price paid by Mr. Ahmad after availing Trade Discount of 10% is equal to
9,000
Answer of Requirement 2 - (Payment of invoice price on 29 th November 2021 with terms
[2/10, n/30] )
Cash discount. = Invoice Price x Discount rate
= Rs. 9,000 x 2/100
= Rs. 180
Amount effectively paid by Mr. Ahmad = Bill value - Cash discount
= Rs. 9,000 - Rs. 180
= Rs. 8820 /-
Practice Question No. 2:
A supplier sells a pair of Gloves for Rs. 800 each with a 7% trade discount. On 1 st December,
2021, Mr. Usman purchased 15 pairs of Gloves from that supplier with credit terms of 6/8, n/14.
On 8th December, 2021, Mr. Usman paid to the supplier and settled his account.
Requirement:
i. Calculate the invoice price of 15 pairs of Gloves?
ii. Calculate the final amount, paid by Mr. Usman on 8th December, 2021.

Answer of Requirement 1- (Calculation of invoice price)

1 Pair of Gloves Price= Rs. 800
15 Pairs of Gloves Price: Rs. 800 * 15 = 12,000

Trade Discount = List Price x Discount rate

Trade Discount = Rs. 12,000 x 7/100
Trade Discount = 840
Invoice Price = List Price-Trade Discount
Invoice Price = 12,000 – 840
Invoice Price = 11,160
So, the Invoice Price paid by Mr. Usman after availing Trade Discount of 7% is equal to
11,160
Answer of Requirement 2 - (Payment of invoice price on 8 th December, 2021 with terms 6/8,
n/14
Cash discount. = Invoice Price x Discount rate
= Rs. 11,160 x 6/100
= Rs. 669.6
Amount effectively paid by Mr. Usman = Bill value - Cash discount
= Rs. 11,160 - Rs. 669.6
= Rs. 10,490.4 /-