How to treat discount applicable to multiple expenses

[Michael Hendry]

On 11 Apr 2013, at 12:03, Fabian Castle <fc451 at yahoo.com> wrote:

> Newbie question. I want to track my Cable Company expenses tel/Internet/TV as split which are listed separately on the bill and charged to Credit Card. How do I treat the bundle discount that isn't allocated to a particular expense on the Bill. Thx
> 
> 
> Expenses:TV$75
> Expenses: Internet$50
> Expenses: Telephone$50
> 
> How to Treat Bundle Discount $45
> 
> Liabilities: CreditCard$130
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In the absence of any information from your Cable Company about the way the discount is split, I would allocate the discount in proportion to the contribution of each service to the pre-discount bill.

75:50:50 is the same as 3:2:2

Divide 45 by 7, and multiply by 3, 2 and 2 respectively to get 6.43 then 19.29:12.86:12.86.

Because the figure of 6.43 is rounded up from 6.428571428571 … you then need to round one of the figures down one cent to get the total right, so 19.28 + 12.86 + 12:86 = 45.00.

So your TV expenses go down by $19.28, and the other two by $12.86 in the split.

More a case of arithmetic than accountancy, so I think I'm on firm ground here!

Michael