On October 1, ABC purchases 200 units of inventory from XYZ for $90 per unit. These units had a cost of $50/unit for XYZ. The terms of the sale are 2/15 n/45. On October 5, ABC returns 10 units to XYZ (there are no defects with the returned units). ABC pays for the inventory on October 9. On October 22, ABC sells 10 units of the inventory purchased on October 1 for $200 per unit on credit.

Prepare the entries (T Accounts) for the purchase, purchase return and purchase discount for ABC.

Prepare the entries (T Accounts) for the sale, sales return, and sales discount for XYZ.

What is the income statement and cash flow impact of every entry?