Question

The balance of LandyLandy ​Corporation's accounts payable at the beginning of the most recent year was $ 50 comma 000$50,000. At the end of the​ year, the accounts payable balance was $ 54 comma 000$54,000. Landy'sLandy's sales revenue for the year was $ 3 comma 105 comma 000$3,105,000​, while its cost of goods sold for the year was $ 1 comma 508 comma 000$1,508,000. Calculate Landy'sLandy's ​days' payable outstanding​ (DPO) for the year. Assume inventory levels are constant throughout the year. If the credit terms from Landy'sLandy's suppliers are​ n/30, how would you interpret Landy'sLandy's ​DPO? ​(Round the DPO to two decimal​ places, X.XX.)

Answer 1

Step-by-step explanation:

In the event that Inventory level is consistent consistently ,it implies starting stock and consummation stock are same in this way Purchase is equivalents to cost of merchandise sold = 1508000

Average accounts payable =[Beginning payable +ending payable ]/2

= [50000+ 54000]/2

= 52000

days' payable outstanding​ = 365 *Average accounts payable /cost of goods sold

= 365 * 52000/1508000

= 12.59 days

The days payable exceptional estimates normal number of time organization takes to pay to its providers .in the given circumstance Landy​Corporation have 30 days of time to pay to its provider anyway the equivalent is paid withing 13 days (approx) it implies Landy​Corporation can't utilize credit office accessible (convey assets ).