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Q2. The fertilizer distributor owed Nitrogen Chemicals of Zambia (NCZ) K200,000 for the purchase of fertilizers. It pays NCZ on 5th September, 2020 by cash

Q2. The fertilizer distributor owed Nitrogen Chemicals of Zambia (NCZ) K200,000 for the purchase of fertilizers. It pays NCZ on 5th September, 2020 by cash within the time limits given by NCZ for a cash discount of 5 per cent. You are required to; a) Calculate how much the fertilizer distributor should pay to NCZ. (2 Marks) b) Calculate the amount of cash discount involved. (1 Mark) c) Explain the effects of the discount on the accounting equation. (3 Marks) d) Use T-Accounts to represent double entries for the transaction of 5th September, 2020 when the Fertilizer distributor paid NCZ.

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