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

Respuesta :

Whenever inventory levels are consistent, starting stock and consummation stock are the same. In this way, the purchase is equivalent to the 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  

It describes how long an organization normally takes to pay its providers. Landy Corporation has 30 days to pay its provider, however, the equivalent is paid within 13 days (approximately), so Landy Corporation is unable to use credit offices (convey assets).

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