A company reports Cost of Goods Sold of $275,000, Ending Inventory of $120,000, Beginning Inventory of $15,000, Ending Accounts Payable of $110,000 and Beginning Accounts Payable of $80,000. What is the days' payable outstanding? (Round any intermediary calculations to two decimal places and your final answer to the nearest day.)

Question

Quizplus · Accepted Answer

Days' Payable Outstanding (DPO) is calculated as (Average Accounts Payable / Cost of Goods Sold) * 365. Average Accounts Payable = ($80,000 + $110,000) / 2 = $95,000. DPO = ($95,000 / $275,000) * 365 = 126.18, rounded to 126 days.

A Company Reports Cost of Goods Sold of $275,000, Ending