What average age of accounts payable is forecast for the budget period? (Use the

Question

What average age of accounts payable is forecast for the budget period? (Use the following data to answer this question.) BALANCE SHEETS ASSETS CASH ACCOUNT RECEIVABLE OTHER CURRENT ASSETS TOTAL CURRENT ASSETS OTHER ASSETS (NET) TOTAL ASSETS 12/32/20Xx2 2/20x212/31/20X3 $40,000 80,000 30,000 $50,000 120,000 15,000 150,000 25,000 $175,000 185,000 20,000 $205,000 EQUITIES ACCOUNT PAYABLE TAX PAYABLE NOTES PAYABLE TOTAL CURRENT LIABILITIES LONG TERM DEBT CAPTIAL STOCK RETAINED EARNINGS NET WORKTH TOTAL EQUITIES $25,000 5,000 25,000 $35,000 5,000 20,000 55,000 50,000 60,000 65,000 50,000 20,000 50,000 30,000 70,000 $175,000 80,000 $205,000

Explanation / Answer

Average Accounts Payable = (25000+35000)/2 = $30000.

Raw material = $334000

Accounts payable turnover = $334000/$30000 = 11.133.

Accounts payable days = 360/Accounts payable turnover = 360 / 11.1333 = 32 days.(Approx 30 days)

Therefore, the correct answer is option B.

Related Questions

Navigate

• Browse (All)
• Browse W
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.