ABC Company has annual sales of 501059 The cost of goods sol

ABC Company has annual sales of $501,059. The cost of goods sold are $308,686. The firm has an accounts receivable balance of $21,063 and an accounts payable balance of $20,915. How many days does it take the firm to pay its suppliers? Assume 365 days.

Solution

Accounts payable days = Average Accounts Payable×365÷Cost of Goods Sold

= $20,915×365÷$308,686

= 24.73 Days