Haletone Corp provides the following information for 20X6 and 20X7 $$\begin{array} { | l | r | r | }
\hline & \underline { \mathbf { 2 0 X6 } } & \underline { \mathbf { 2 0 X 7 } } \
\hline \text { Current assets } & \$ 23,000 & \$ 27,000 \
\hline \text { Accounts payable } & 9,000 & 10,000 \
\hline \text { Other current liabilities } & 5,000 & 4,000 \
\hline \text { Non-current liabilities } & 50,000 & 62,000 \
\hline \text { Sales } & 125,000 & 135,000 \
\hline \text { Cost of sales } & 75,000 & 79,600 \
\hline
\end{array}$$ Haletone's days payable outstanding for 20X7 is closest to
A) 47.2 days
B) 43.6 days
C) 48 days
D) 46.2

Question

Haletone Corp provides the following information for 20X6 and 20X7 $$\begin{array} { | l | r | r | } 
\hline & \underline { \mathbf { 2 0 X6 } } & \underline { \mathbf { 2 0 X 7 } } \
\hline \text { Current assets } & \$ 23,000 & \$ 27,000 \
\hline \text { Accounts payable } & 9,000 & 10,000 \
\hline \text { Other current liabilities } & 5,000 & 4,000 \
\hline \text { Non-current liabilities } & 50,000 & 62,000 \
\hline \text { Sales } & 125,000 & 135,000 \
\hline \text { Cost of sales } & 75,000 & 79,600 \
\hline
\end{array}$$ Haletone's days payable outstanding for 20X7 is closest to
A) 47.2 days
B) 43.6 days
C) 48 days
D) 46.2

Quizplus · Accepted Answer

Days Payable Outstanding (DPO) for 20X7 is calculated as follows: $$DPO = \frac{\text{Accounts Payable}}{\text{Cost of Sales} / 365}$$ For 20X7, this is $$\frac{10,000}{79,600 / 365} \approx 45.9$$ days. The closest option provided is 43.6 days.

Haletone Corp Provides the Following Information for 20X6 and 20X7