Question

During 2019, Barry Bees, Inc.'s Sales equal $30,000 and Cost of goods sold equals $10,000. Its December 31, 2018 Accounts payable was $800 and its December 31, 2019 Accounts payable is $1,200. Barry Bee's accounts payable turnover equals ______ times for the year ended December 31, 2019. 10

Answer 1

Answer:

The accounts payable turnover equals 10 times.

Explanation:

The accounts payable turnover is computed as:

Accounts Payable turnover = Total amount of purchase on credit or COGS / Average Accounts Payable

where

Total amount of purchase on credit or COGS is 10,000

Average Accounts Payable is 1,000

Putting the values in the formula:

= 10,000 / 1,000

= 10 times

Working Note:

Average Accounts Payable = Beginning Accounts Payable + Ending Accounts Payable / 2

= 800 + 1,200 /2

= 2,000 / 2

= 1,000