The Down Towner has sales of $642,000 and average accounts payable of $56,400.The cost of goods sold is equivalent to 68 percent of sales.How long does it take Down Towner to pay its suppliers?

Name: The Down Towner has sales of $642,000 and average accounts payable of $56,400.The cost of goods sold is equivalent to 68 percent of sales.How long does it take Down Towner to pay its suppliers?
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Question

Quizplus · Accepted Answer

Payables turnover = ($642,000 × .68)/$56,400 = 7.74Payables period = 365/7.74 = 47.16 days

The Down Towner Has Sales of $642,000 and Average Accounts