(Learning Objective 2: Calculate days’ payable outstanding) The balance of LandyCorporation’s accounts payable at the beginning of the most recent year was $50,000. At theend of the year, the accounts payable balance was $54,000. Landy’s sales revenue for the yearwas $3,105,000, while its cost of goods sold for the year was $1,508,000. Calculate Landy’sdays’ payable outstanding (DPO) for the year. Assume inventory levels are constant throughoutthe year. If the credit terms from Landy’s suppliers are n/30, how would you interpret Landy’sDPO?
(Learning Objective 2: Calculate days’ payable outstanding) The balance of LandyCorporation’s accounts payable at the beginning of the most recent year was $50,000. At theend of the year, the accounts payable balance was $54,000. Landy’s sales revenue for the yearwas $3,105,000, while its cost of goods sold for the year was $1,508,000. Calculate Landy’sdays’ payable outstanding (DPO) for the year. Assume inventory levels are constant throughoutthe year. If the credit terms from Landy’s suppliers are n/30, how would you interpret Landy’sDPO?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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(Learning Objective 2: Calculate days’ payable outstanding) The balance of Landy
Corporation’s accounts payable at the beginning of the most recent year was $50,000. At the
end of the year, the accounts payable balance was $54,000. Landy’s sales revenue for the year
was $3,105,000, while its cost of goods sold for the year was $1,508,000. 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?
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