Question

Heritage, Inc., had a cost of goods sold of $45,321. At the end of the year, the accounts payable balance was $8,513. How long on average did it take the company to pay off its suppliers during the year

Answer 1

Answer:

The company took 69 days to pay off its suppliers during the year.

Explanation:

Account payable days are the average number of days that a company takes to pay its supplier.

Account Payable days = ( Account Payable / Cost of goods sold ) x 365

Account Payable days = ( $8,513 / 45,321 ) x 365

Account Payable days = 68.56 days

Account Payable days = 69 days