Balance at the bank ( video below)

A business had a balance at the bank of $5,000  at the start of the month. During the following month, it paid for materials invoiced at $2,000  less trade discount of 20% and cash discount of 15%. It received a cheque from a customer in respect of an invoice for $400, subject to cash discount of 5%.

What was the balance at the bank at the end of the month?

Answer

$

Opening bank balance                     5,000

Payment ($2,000 – $400 ) x 85%    (1,360)

Receipt ($400 – $20)                          380

Closing bank balance                       4,020