Waec Model Questions Vol1 2025 Commerce Question 45

A company receives a commercial invoice for a shipment of goods with the following details: • Goods: 150 units at ₦2,500 each. • Trade discount: 12% on the total goods value. • Freight charges: ₦18,000 (added after discount). • Insurance: 0.8% of the goods value after trade discount. • Value Added Tax (VAT): 7.5% applied on the sum of goods value after trade discount, freight, and insurance. • Cash discount: 3% offered if payment is made within 10 days; the company intends to pay within this period. The accompanying purchase order stipulated a maximum unit price of ₦2,550. Determine: (a) Whether the invoice complies with the purchase order price limit. (b) The net amount payable after applying the trade discount, adding freight and insurance, applying VAT, and then deducting the cash discount. (c) The amount of VAT that is attributable solely to the insurance component. (d) If the freight charge was mistakenly entered as ₦18,000 instead of the correct ₦15,000, recalculate the net payable amount (including cash discount) and state the difference from the original net payable.