Question

HG Livery Supply had a beginning accounts payable balance of $57,300 and an ending accounts payable balance of $55,100. Sales for the period were $610,000 and costs of goods sold were $458,000. What is the payables turnover rate

Answer 1

8.14 times

Step-by-step explanation:

Given:

Beginning accounts payable balance = $ 57,300

Ending accounts payable balance = $ 55,100

Sales for the period = $610,000

Costs of goods sold = $ 458,000

Now,

the Average accounts payable balance = ( $ 57,300 + $ 55,100 ) / 2

or

the Average accounts payable balance = $ 56,200

Now,

Payable turnover rate

= Costs of goods sold / Average accounts payable balance

or

= $ 458,000 / $ 56,200 = 8.14 times