Question 7
Purchase and Sale of GoodsUse the information below to answer questions 7 and 8.
Ojo purchased the following items from Sani at the specified prices on credit: 200 cartons of milk at ₦1,000 per carton; 150 bags of sugar at ₦500 per bag; 50 bags of rice at ₦3 000 per bag. Sani allowed 10% trade discount and 5% cash discount, if payment is made within the agreed period. Ojo paid within the agreed period.
What was the amount paid by Ojo?
- A.₦382,500
- B.₦425,000
- C.₦363,375
- D.₦61,625
Show the answer and explanation
Answer: C (₦363,375)
Explanation
List price = 200,000 + 75,000 + 150,000 = ₦425,000. Less 10% trade discount = ₦382,500. He paid on time, so less 5% cash discount (₦19,125) = ₦363,375.