A wholesale firm made sales with a list price of $1, 500 and trade discounts of 25 and 15...
Question:
A wholesale firm made sales with a list price of $1, 500 and trade discounts of 25 and 15 percent. Calculate the amount the firm will use to record the sale in the sales journal.
a. Invoice price will be equal to $956.25
b. Invoice price will be equal to $900
c. Invoice price will be equal to $600
d. Invoice price will be equal to $543.75
List price vs sales price
Generally on retail shops the price is shown with a discount, this discount doesn't reduce the profit margin of the trader because the price shown is not the actual sale price instead it is the list price which is calculated by raising up the cost by a percentage which is higher then the total of profit margin and discount rate.
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Trade Discount: Definition & Formula
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Chapter 4 / Lesson 21
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Understand what trade discounts are through their definition and their uses. Learn how to compute trade discounts with step-by-step calculations in given examples.
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