If Justin pays the balance of his account after the discount period, he should pay $200. Since Justin returned half of the items after the discount period, he has to pay the full price of accumulated time which results in paying the full $200. A discount period is the amount of time a cash discount is available when making a cash payment. Some companies will reduce the price of a product if the customer pays for it in cash.
He will pay $200
Firstly we calculate the Net purchase
Net Purchases = Purchases - Purchase Returns
Net Purchases = $400 - $200
Net Purchases = $200
Given that the Credit term = 1/10, n/30. The 1% discount will be given if payment is done within the discount period. Here, the payment will be done after the discount Period.
Therefore, the amount he will pay will equal the net Purchases which is $200
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