Question

CH 14 Homework Send to Gradebook < Prev Next > Question 10 View Policies Current Attempt in Progress Crane Handicrafts, Inc., has net sales of $3.95 million with 50 percent being credit sales. Its cost of goods sold is $2.37 million. The firm's cash conversion cycle is 43.0 days, and its operating cycle is 91.0 days. What is the firm's accounts payable? (Use 365 days for calculation. Round final answer to the nearest whole dollar, e.g. 5,275.) Excel Template (Note: This template includes the problem statement as it appears in your textbook. The problem assigned to you here may have different values. When using this template, copy the problem statement from this screen for easy reference to the values you've been given here, and be sure to update any values that may have been pre-entered in the template based on the textbook version of the problem.) Accounts payable $ eTextbook and Media Attempts: 0 of 3 used Submit Answer Send to Gradebook

Answer 1

Days in Payable Period = Operating Cycle - Cash Conversion Cycle

= 91 - 43 = 48 days

Days in Payable Period = 365 / [Cost of goods sold / Accounts Payable]

48 = 365 / [$2,370,000 / Accounts Payable]

$2,370,000 / Accounts Payable = 365 / 48

$2,370,000 / Accounts Payable = 7.60

Accounts Payable = $2,370,000 / 7.60 = $311,671