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How will You Solve My Merchandising Topics?

1. I would like to ask if trade discount is given then cash discount is also given would you deduct both to the list price?
2. What if it is paid after the discount period?
3. And I would like to know how to prepare journal entries for this problem. On May 15, 2015, the Guzon Book Distributors acquired for resale books on account with a list price of Php 108,000. Butuan Publishing, the supplier, allowed a 15% trade discount as well as a credit term of 2/10,
n/30. Guzon paid the invoice in full on May 20, 2015. -  Hertz Chee Rivera


1. Yes, we will deduct from both discount if we want to calculate the sale value because we did not sell on list price.
2. If it paid also discount period, we will only deduct trade discount not cash discount because cash discount is given for fast payment and you will given the deadline by seller. Buyer has crossed the deadline, so need not to deduct it from list price. If trade discount has also deadline, we will also follow it.
3. Guzon books distributors is the buyer and butuan publishing is the seller. So following entry will pass in the books of Guzon books distributors

On 15th May 2015

Purchase Account Debit 91800

Butuan Publishing Credit 91800

On 20th May 2015

Butuan Publishing Debit 91800

Bank account Credit 91800

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Accounting ! Answers: How will You Solve My Merchandising Topics?
How will You Solve My Merchandising Topics?
Accounting ! Answers
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