(a) Write in full the following abbreviations as used in commerce:
(i) COD (ii) CIF (iii) FOB; (iv) E and O.E.
(b) The sale of consumer goods costing N 100,000 attracts a cash discount of 7½% and a quantity discount of 5%. Calculate the:
(i) value of the quantity discount
(ii) value of the cash discount
(iii) net amount of money payable by the buyer.
(a) FULL MEANING OF ABBREVIATIONS USED IN COMMERCE
(i) C.O.D. = Cash on Delivery
(ii) = Cost, Insurance and Freight
(iii) F.O.B. = Free on Board
(iv) E and O.E. = Errors and Omissions Excepted.
(b) CALCULATIONS
(i) Calculation of Quantity Discount Cost of goods = N100,000 Quantity discount (5%) = 5/100 * 100,00 100 = N5,000
(ii) Calculation of Cash Discount Cash payable N100,000 - N5,000 = N95,000 Cash discount (7½%) = 7½/100 #95000 = 15/200 * 95000 = N7,125
(iii) Calculation of net amount payable Cost of goods 10,000 Less quantity discount 5,000 Net amount payable N95,000 Less the cash discount N7,125 Net Amount payable N87,875
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