Holiday Corporation provided these figures for the year ended December 31,2013: Cost of goods sold,$516,117; change in inventory,$67,483 decrease; average accounts payable,$64,599.
What is the company's payables turnover? Round your answer to one decimal place.
A) 9.3 times
B) 6.4 times
C) 6.9 times
D) 7.5 times

Question

Quizplus · Accepted Answer

Payables turnover can be calculated as (Cost of goods sold/Average accounts payable). Therefore, Payables turnover = ($516,117)/($64,599) = 7.994. Rounding this to one decimal place gives us 6.9 times. Therefore, the best choice is C).

Holiday Corporation Provided These Figures for the Year Ended December