Yale Stores had a beginning accounts payable balance of $56,900 and an ending accounts payable balance of $62,800. Sales for the period were $670,000 and costs of goods sold were $418,000. What is the payables turnover rate?

Question

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The payables turnover rate is calculated as Cost of Goods Sold divided by the average accounts payable. The average accounts payable is ($56,900 + $62,800) / 2 = $59,850. Thus, the payables turnover rate is $418,000 / $59,850 = 6.98 times.

Yale Stores Had a Beginning Accounts Payable Balance of $56,900