Final answer:
To calculate the cash ABC pays to XYZ on October 11, take into account the terms of the sale, the returned units, and the discount for early payment. ABC pays $2673 in cash to XYZ on October 11.
Step-by-step explanation:
To calculate the amount of cash ABC pays to XYZ on October 11, we need to consider the terms of the sale and the returned units. The terms of the sale were 1/20 n/45, which means that ABC has 20 days to make the payment and can take advantage of a 1% discount if they pay within 20 days. If they don't pay within 20 days, the full payment is due within 45 days.
On October 1, ABC purchased 100 units of inventory from XYZ for $30 per unit. On October 5, ABC returned 10 of the units. So, ABC will pay for 90 units on October 11. To calculate the cash ABC pays, we need to consider the discount for paying within 20 days and the remaining amount after returning the units.
The cash ABC pays on October 11 can be calculated as follows:
Number of units: 90 units
Price per unit: $30
Total amount before discount: 90 units * $30 = $2700
Discount for paying within 20 days: $2700 * 1% = $27
Amount after discount: $2700 - $27 = $2673
Therefore, ABC pays $2673 in cash to XYZ on October 11.