To determine the amount payable by Tei Ltd if payment is made on the 40th day, we need to follow a series of steps to apply the trade discount and the cash discount correctly. Let's break this down step-by-step.
Step 1: Calculate the Total Sales Amount Before Discounts
First, we need to calculate the total sales amount before any discounts are applied. The formula for this is:
[
\text{Total Sales} = \text{Number of Units} \times \text{Price per Unit}
]
Given:
- Number of Units = 1,560
- Price per Unit = N60
Calculating the total sales:
[
\text{Total Sales} = 1,560 \times 60 = N93,600
]
Step 2: Apply the Trade Discount
Next, we apply the trade discount of 10%. The trade discount is calculated on the total sales amount. The formula for the trade discount is:
[
\text{Trade Discount} = \text{Total Sales} \times \text{Trade Discount Rate}
]
Calculating the trade discount:
[
\text{Trade Discount} = 93,600 \times 0.10 = N9,360
]
Now, we subtract the trade discount from the total sales amount to find the net sales amount:
[
\text{Net Sales} = \text{Total Sales} - \text{Trade Discount}
]
Calculating the net sales:
[
\text{Net Sales} = 93,600 - 9,360 = N84,240
]
Step 3: Apply the Cash Discount
Since the payment is made on the 40th day, we need to apply the cash discount of 5% (as the payment is made within 60 days but after 30 days). The cash discount is calculated on the net sales amount. The formula for the cash discount is:
[
\text{Cash Discount} = \text{Net Sales} \times \text{Cash Discount Rate}
]
Calculating the cash discount:
[
\text{Cash Discount} = 84,240 \times 0.05 = N4,212
]
Now, we subtract the cash discount from the net sales amount to find the final amount payable:
[
\text{Amount Payable} = \text{Net Sales} - \text{Cash Discount}
]
Calculating the amount payable:
[
\text{Amount Payable} = 84,240 - 4,212 = N80,028
]
Conclusion
The correct answer is
C. 80,028.
Explanation of Other Options
-
Option A (88,920): This option does not account for the trade discount and cash discount correctly. It seems to be the total sales amount after the trade discount but before applying any cash discount.
-
Option B (84,240): This option represents the net sales amount after applying the trade discount but does not account for the cash discount, which is necessary since the payment is made within 60 days.
-
Option D (72,025): This option appears to be a miscalculation, possibly involving incorrect application of discounts or incorrect arithmetic.
Revision Summary
- Calculate total sales by multiplying the number of units by the price per unit.
- Apply the trade discount to find the net sales amount.
- Apply the appropriate cash discount based on the payment timing.
- Subtract the cash discount from the net sales to find the final amount payable.