A trader's purchases on credit for April amounted to $\$ 2000$. These purchases were subject to a trade discount of 10\% and also a cash discount of 5\% for accounts paid within 30 days. How much was entered in the purchases journal?
Explanation
The purchases were subject to a trade discount of 10% and a cash discount of 5% for accounts paid within 30 days. The trade discount of 10% is 10% of $2000, which is $200. The cash discount of 5% is 5% of $2000, which is $100. The total discount is $200 + $100 = $300. Therefore, the amount entered in the purchases journal is $2000 - $300 = $1700.
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