What to do for adjustment no 4. creditors -30000,bills payable -8000

Dear student
1) it will be discount @ 6 % per annum on creditors and bills payable. As payment is due after one month and we pay immediately.therefore, we received discount.its calculated will be as follows:
(a) amount paid to creditors will be Rs 29,850 as we get discount of rs 150 i.e. (30,000 X 6100 X 112 = Rs 150). so, rs (30,000 - 150 = Rs 29,850)
(b) amount paid to bills payable will be rs 7,960 as we get discount of rs 40. i.e. (8000 X 6100 X 112= rs 40). so, rs ( 8,000 - 40 = Rs 7,960)
Regards

  • 0
Discount on creditor for one month
=30,000?1/12?6/100
=150
amt. Paid to creditors =30,000-150
=29850

Discount on bills payable for one month
= 8000?1/12?6/100
=40
Amt. Paid for bills payable =8000-40
=7960
  • 3
It means that they are due on April end. But since they are being paid one month before their due dates, 6% p.a. discount is provided. 
So, 6% p.a. for one month is deducted as the cash discount.
  • -1
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