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

Answer:

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

25 days

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