Question

Review the video to help you answer the following question. Royer Corporation reports Cost of Goods Sold of $220,000, Ending Inventory of $28,000, Beginning Inventory of $43,000, Ending Accounts Payable of $27,000 and Beginning Accounts Payable of $17,000. What is the accounts payable turnover in days (DPO)? (Round any intermediary calculations and your final answer two decimal places, X.XX.) O A. 44.79 OB. 36.50 OC. 28.21 OD. 39.16

Answer 1

Average accounts payable = (Beginning accounts payable + Ending accounts payable)/2

= (17,000 + 27,000)/2

= 44,000/2

= $22,000

Purchases = Cost of goods sold + Ending inventory - Beginning inventory

= 220,000 + 28,000 - 43,000

= $205,000

Accounts payable turnover = Purchases/Average accounts payable

= 205,000/22,000

= 9.31 times

Accounts payable turnover in days = 365/Accounts payable turnover

= 365/9.31

= 39.16

Correct option is (D)

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