To determine the cash discount allowed on the 50th day for Tei Ltd's magazine sales, we need to follow a series of steps to calculate the net sales amount after applying the trade discount and then apply the appropriate cash discount based on the timing of the payment. Step-by-Step Explanation

1. Calculate the Total Sales Before Discounts:
2. Tei Ltd offered 1,560 units of magazines at N60 each.
3. Total sales = Number of units × Price per unit [ \text{Total Sales} = 1,560 \text{ units} \times N60 = N93,600 ]
4. Apply the Trade Discount:
5. The trade discount is 10%. This discount is applied to the total sales amount.
6. Trade discount amount = Total sales × Trade discount rate [ \text{Trade Discount} = N93,600 \times 10\% = N9,360 ]
7. Net sales after trade discount = Total sales - Trade discount [ \text{Net Sales} = N93,600 - N9,360 = N84,240 ]
8. Determine the Cash Discount Applicable:
9. Tei Ltd offers a cash discount of 10% if payment is made within 30 days and 5% if payment is made within 60 days.
10. Since the payment is made on the 50th day, the applicable cash discount is 5%.
11. Calculate the Cash Discount:
12. Cash discount amount = Net sales after trade discount × Cash discount rate [ \text{Cash Discount} = N84,240 \times 5\% = N4,212 ]

Conclusion The cash discount allowed on the 50th day is N4,212. Therefore, the correct option is D. Explanation of Other Options

• Option A (N9,360): This amount represents the trade discount, not the cash discount. It is incorrect because it does not consider the net sales after the trade discount.
• Option B (N8,424): This amount does not correspond to any calculation related to the discounts provided. It seems to be a miscalculation and is incorrect.
• Option C (N4,680): This option is incorrect as it does not reflect the correct cash discount calculation based on the net sales after the trade discount.

Common Pitfalls

• Confusing Trade Discount with Cash Discount: It's important to remember that trade discounts reduce the selling price before calculating the cash discount.
• Misapplying Cash Discount Rates: Ensure you apply the correct cash discount based on the timing of the payment. In this case, since the payment was made on the 50th day, the 5% cash discount applies.

Revision Summary

• Total sales = Number of units × Price per unit.
• Apply trade discount to find net sales.
• Determine cash discount based on the timing of payment.
• Cash discount is calculated on the net sales after trade discount.

By following these steps, you can accurately calculate cash discounts in similar scenarios.