Wholesome Foods has a cash cycle of 21 days,an operating cycle of 46 days,and an inventory period of 1.5 days.The company reported cost of goods sold in the amount of $320,000,and credit sales were $410,000.What is the company's average balance in accounts payable?

Question

Quizplus · Accepted Answer

The average balance in accounts payable is calculated as follows:Average balance in accounts payable = (Cost of goods sold / 365 days) x Operating cycle= ($320,000 / 365 days) x 46 days= $21,918

Wholesome Foods Has a Cash Cycle of 21 Days,an Operating