Question

On May 26, XYZ Company purchased inventory for $25,500 on account.
The discount terms were 8/15, n/40. XYZ Company paid one-third of
its bill on June 1, paid one-third of its bill on June 7, and paid
the final one-third of its bill on June 13.

Calculate the total amount of cash paid by XYZ Company for its
purchase of inventory.

Answer 1

$24,140
Paid on			Total Amount			In Discount period	Discount	Net Amount Cash Paid
June 1	1/3	x	$25,500	=	$8,500	Yes	$680	$7,820
							($8,500 x 8%)
June 7	1/3	x	$25,500	=	$8,500	Yes	$680	$7,820
							($8,500 x 8%)
June 13	1/3	x	$25,500	=	$8,500	No	-	$8,500
								$24,140