Mahendra started a business on 1 November 20–7. He provided the following information for his first month of trading:

Nov 1 Introduced $160 000 capital into the business, of which $158 500 was transferred into a business bank account and the rest was placed in the business cash box
2 Purchased premises, $95 000, paying by credit transfer
5 Bought goods for resale, $2 600, on credit from Duleep
10 Returned goods, $150, to Duleep
14 Paid general expenses in cash, $275
19 Paid rates in cash, $395
21 Sold goods on credit to Anila, $124 Paid carriage on good sold, $95, in cash
24 Paid Duleep $1 000 by cheque on account
28 Took goods costing $250 for personal use
30 Rented out part of the premises and received $260 rent by cheque

a. Enter these transactions in the cash book and ledgers. Balance the cash book and Duleep’s account. Bring down the balances on 1 December 20–7.

b. Prepare a trial balance on 30 November 20–7.
Mahendra is considering allowing credit customers a cash discount for prompt payment.

c. Explain the effect that this suggestion may have on Mahendra’s cash flow. 

d. State how this discount would be recorded if Mahendra decided to proceed with this suggestion.