To calculate the amount that Krans LTD paid to settle their account on 20 May 2019, we need to go through the transactions step by step.
Step 1: Initial Purchase
- Initial Merchandise Purchase: R8,320
Step 2: Merchandise Return
- Merchandise Returned: R1,210
Step 3: Net Purchase Amount
To find the net amount after the return, we subtract the value of the returned merchandise from the initial purchase:
\[ \text{Net Purchase Amount} = \text{Initial Purchase} - \text{Returns} \] \[ \text{Net Purchase Amount} = R8,320 - R1,210 = R7,110 \]
Step 4: Calculate Settlement Discount
Krans LTD received a settlement discount of 7% on the net purchase amount.
To calculate the discount: \[ \text{Settlement Discount} = \text{Net Purchase Amount} \times \text{Discount Rate} \] \[ \text{Settlement Discount} = R7,110 \times 0.07 = R497.70 \]
Step 5: Calculate Amount Paid After Discount
To find the amount that Krans LTD paid after applying the settlement discount, we subtract the discount from the net purchase amount:
\[ \text{Amount Paid} = \text{Net Purchase Amount} - \text{Settlement Discount} \] \[ \text{Amount Paid} = R7,110 - R497.70 = R6,612.30 \]
Final Calculation
Krans LTD paid R6,612.30 to settle their account on 20 May 2019.
Summary:
- Initial Purchase: R8,320
- Merchandise Returned: R1,210
- Net Purchase Amount: R7,110
- Settlement Discount: R497.70
- Amount Paid: R6,612.30
Thus, the final amount paid by Krans LTD is R6,612.30.