Question

The Mountain Top Shoppe has sales of $512,000, average accounts receivable of $31,400 and average accounts payable of $24,800. The cost of goods sold is equivalent to 71 percent of sales. How long does it take The Mountain Top Shoppe to pay its suppliers?

Answer 1

How long does it take The Mountain Top Shoppe to pay its suppliers?

25 days

Step-by-step explanation:

Sales $512,000

COGS 71%

COGS $363,520

Av Acc Receiv 31.400

Av Acc Payable 24.800

Days 365

DPO - Days Payables Outstanding ==> ($24,800/$363,520)*365= 25 Days