Question 8
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.
How much was the trade discount?
- A.₦42,500
- B.₦27,500
- C.₦22,500
- D.₦20,000
Show the answer and explanation
Answer: A (₦42,500)
Explanation
List price = ₦425,000; 10% trade discount = ₦42,500.