The Corner Market has annual sales of $761,000 and cost of goods sold of $568,000.The profit margin is 4.2 percent and the accounts payable period is 37 days.What is the average accounts payable balance?

Question

Quizplus · Accepted Answer

The formula for calculating the average accounts payable balance is:

Average Accounts Payable = (Accounts Payable Period / 365) x Cost of Goods Sold

In this case, Cost of Goods Sold is $568,000 and Accounts Payable Period is 37 days.

So, Average Accounts Payable = (37 / 365) x $568,000 
= $57,578 (rounded off to the nearest dollar)

Therefore, the best choice is C.

The Corner Market Has Annual Sales of $761,000 and Cost