Question

Your business purchased inventory on 02/07/15. The total invoice was $11,000 and the terms were 5/10, n30.

All answers are numbers which consist only of the digits 0 to 9. Symbols or punctuation marks should NOT be incorporated in answers.

If you paid this invoice on 15/07/15 calculate:

The amount of any discounts that may be applicable (inc GST)	Answer
GST related to discount if any	Answer
Discount net of GST if any	Answer
Amount of GST in the original invoice	Answer
Total amount that will be payable	Answer

If you paid this invoice on 12/07/15 calculate:

The amount of any discounts that may be applicable (inc GST)	Answer
GST related to discount if any	Answer
Discount net of GST if any	Answer
Amount of GST in the original invoice	Answer
Total amount that will be payable	Answer

GTS 10%

Answer 1

Facts:

Inventory is purchased on = 02/07/2015

Total invoice was = $11,000

Terms are = 5/10, n30 (which means if paid within 10 days from the invoice 5% discount is allowed else entire amount falls due within 30days

Original Invoice Breakup:

Purchases = $10000

GST @10% = $1000

Total Invoice value = $11000

1. If the invoice paid on 15/07/2015

Since the payment is being made on 15/07/2015 which is exceeding 10days from the Invoice amount, discount is not allowed to us on payment. Hence should pay the entire bill amount.

Particulars	Calculation	Amount
Amount of any discount that may be applicable (including GST)		0
GST Related to discount, if any		0
Discount net of GST, if any		0
Amount of GST in original invoice	$10000*10%	1000
Total amount that will be payable	$10000+$1000	11000

2. If the invoice paid on 12/07/2015

Since the discount terms are already agreed earlier, now taxable value shall be treated giving effect of discount. Hence, the GST already availed by our Company should reverse the Input tax credit corresponding to discount. And shall also decrease such amount while remitting the payment.

Particulars	Calculation	Amount
Amount of any discount that may be applicable (including GST)	$11000*5%	550
GST Related to discount, if any	$1000*5%	50
Discount net of GST, if any		500
Amount of GST in original invoice	$10000*10%	1000
Total amount that will be payable	$11000-$500-$50	10450