2020 SMSS 3N POA EOY P2 Q4
4 Happy Supplies is a business that buys and sells home appliances to retail shops on credit. The following information relates to Sean’s account in the books of Happy Supplies for the month of July.
During July, Happy Supplies had the following transactions with Sean.
2020 | |
Jul 1 | Sean owed Happy Supplies, $11 820. |
8 | Happy Supplies sold goods to Sean at a list price of $28 000 less 15% trade discount. |
18 | Sean returned goods bought on July 8, list price $1 400. |
26 | Sean paid a cheque for $2 400 after deducting $100 cash discount. |
REQUIRED
a. Prepare Sean’s account for the month of July 2020 in Happy Supplies ledger.
[6]
b. State one reason why Happy Supplies give Sean trade discount on 8 July.
[1]
[TOTAL 7]
SOLUTION
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a)
b)
To encourage Sean to buy in bulk.