ACCA F3 Discount Allowed
Charles entered into the following transactions:
1. He sold goods on credit to Cody with a list price of $90,000. He allows a 10% trade discount and a further 5% discount for payment within seven days. Cody paid within two days.
2. He made a credit sale to Mary allowing a 10% trade discount on the list price of $2,000.
3. He purchased goods for $400 and paid $380, receiving a discount for immediate cash payment.
How much discount should be recorded in the Discount Allowed account as a result of the above transactions?
| List Price | 90,000 |
| Trade Discount | 9,000 |
| Actual sales | 81,000 |
| Early payment discount | 4,050 |
| Discount Allowed | 4,050 |