DISCOUNT-SERIES

Trade Discount and
Discount Series
OBJECTIVES:
After completing this module, you

should be able to compute single
trade discount and discount series
Learning Activity No.1
John bought one sack of onion with a
list price of P1,600.00 subject to a 5%
discount. Discount:
NET INVOICE PRICE:
a. 1,1,
How much is the 600 (0.05)=
600-
discount? 80 = 80
1, 520
b. How much is the net invoice price?
Sisa sold a 0.5 hectares of land for
P300, 000 to Monica with 3% discount.
NETDiscount:
INVOICE PRICE:
a. How much is300,000(
the discount?
300,000- 0.03) = 9,000
9,000= 291,000
b. How much is the net invoice price?
TWO TRADITIONAL METHODS
TO COMPUTE THE NET PRICE
AFTER THE DISCOUNT
USING DISCOUNT METHOD
John bought one sack of onion with a list price of
P1,600.00 subject to a 5% discount.
1, 600 X 0.05 = 80
1, 600 – 80 = 1, 520Net price/ net
invoice price
USING COMPLEMENT METHOD
John bought one sack of onion with a list price of
P1,600.00 subject to a 5% discount.
100% - 5 % = 95%
1, 600 x .95 = 1, 520 Net price/ net
invoice price
EXAMPLE:
My ‘suki’ in the market gives me a 5%
discount on the vegetables. I purchase
everyday. If the price of broccoli this day is
Php150/kilo and I want to buy 2.5 kilos,
how much trade discounts will I get?
USING DISCOUNT METHOD
My ‘suki’ in the market gives me a 5% discount on the vegetables. I
purchase everyday. If the price of broccoli this day is Php150/kilo and I
want to buy 2.5 kilos, how much trade discounts will I get?
375 x 0.05 = 18.75

375 - 18.75 = 356.25 Net price/ net
invoice price
USING COMPLEMENT METHOD
My ‘suki’ in the market gives me a 5% discount on the vegetables. I
purchase everyday. If the price of broccoli this day is Php150/kilo and I
want to buy 2.5 kilos, how much trade discounts will I get?
100% - 5 % = 95%
375 x .95 = 356.25 Net price/ net
invoice price
LIST PRICE?
The list price is the
manufacturer’s suggestion
retail price of a product
DISCOUNTS?
Reduction from the

sales price of a product
TRADE DISCOUNT?
A discount on the selling

price agreed by the
whole seller and buyer.
TRADE DISCOUNT?
Trade discounts are list price reductions that
a business may offer to its business
customers. A trade discount is calculated on
the list price per item, rather than on the
total amount due, because different trade
discounts may be applied to different item
NET INVOICE PRICE?
Discounted amount
to paid
What is the difference
between discount method and
complement method in finding
the net price/ net invoice
price?
DISCOUNT SERIES
Cory sold a washing machine to Kate with
a list price of P 25,000.00 with discount
series of 20% and 10% discount.
a. How much is the discount?

b. What is its net invoice price?
Cory sold a washing machine to Kate with a list price of
P 25,000.00 with discount series of 20% and 10%
discount.
First Discount rate (20%):
25,000 x 0.20 = 5, 000

Step 1: Multiply by the first discount rate
25,000 - 5, 000 = 20,000

Discounted amount for the first discount rate.
Cory sold a washing machine to Kate with a list price of
P 25,000.00 with discount series of 20% and 10%
discount.
Second Discount rate (10%):
20,000 x 0.10 = 2, 000

Step 1: Multiply by the discounted amount with
the second discount rate
20,000 - 2, 000 = 18,000

Net Invoice price for the washing machine with discount series of 20% & 10%.
a. How much is the discount? 7,000

18,000
DISCOUNT SERIES?
In the case of the discount method,
we first apply the first discount rate
to the list price. We then compute
intermediate prices and apply the
second and third discount rates to
these prices.
CONVERT THE SERIES OF DISCOUNTS
TO A SINGLE EQUIVALENT RATE
a. What is the complement discount of

20%? 10%?
FIND THE COMPLEMENT
DISCOUNT RATE
100% - 20% = 80 % STEP 1: Deduct the

series of discounts
individually from
100% - 10% = 90 % 100%.
STEP 2: Multiply the resulting differences by
themselves to get the net invoice price.
80 % x 90% = 72 %
72% is the net invoice price rate

STEP3: Deduct the NIP rate from 100% to get the
single equivalent discount rate.
100% - 72 % = 28%
28% is the single equivalent discount rate

In order for you to get the discount, multiply
the single equivalent discount rate by the list
price.
DISCOUNT:
P 25,000.00 x 28% = P 7,000.00

a. How much is the discount? 7,000

18,000
To get the net invoice price, multiply the
list price by the net invoice price rate.
NET PRICE/ NET INVOICE PRICE:
P 25,000.00 x 72% = P 18,000.00

Practice Exercises:
Practice Exercises:
Practice Exercises:
Practice Exercises:
97% 1, 736.3 53.7
40% 4, 620 3,080
4, 823.53 15% 723.53
7, 333.33 25% 1,833.33
87% 7, 934.4 1, 185.6

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Trade Discount and

After completing this module, you

375 x 0.05 = 18.75

Reduction from the

A discount on the selling

a. How much is the discount?

First Discount rate (20%):

25,000 x 0.20 = 5, 000

25,000 - 5, 000 = 20,000

Second Discount rate (10%):

20,000 x 0.10 = 2, 000

20,000 - 2, 000 = 18,000

a. How much is the discount? 7,000

a. What is the complement discount of

100% - 20% = 80 % STEP 1: Deduct the

72% is the net invoice price rate

28% is the single equivalent discount rate

P 25,000.00 x 28% = P 7,000.00

a. How much is the discount? 7,000

NET PRICE/ NET INVOICE PRICE:

P 25,000.00 x 72% = P 18,000.00

7, 333.33 25% 1,833.33

87% 7, 934.4 1, 185.6

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