Question

A company reports purchases of $ 418 comma 000​, a beginning accounts payable balance of $ 48 comma 000​, and an ending accounts payable balance of $ 40 comma 000. All purchases were on account. The​ company's accounts payable turnover would be closest​ to:____________​(Values are rounded to two decimal​ places, X.XX.)

Answer 1

9.50 times

Step-by-step explanation:

The computation of the accounts payable turnover ratio is shown below:

= Total purchase ÷ average accounts payable

where,

Average accounts payable = (Opening balance of Accounts payable + ending balance of Accounts payable) ÷ 2

= ($48,000 + $40,000) ÷ 2

= $44,000

And, the total purchase is $418,000

Now put these values to the above formula

So, the answer would be equal to

= $418,000 ÷ $44,000

= 9.50 times