Question

Johnson Company has current year accounts payable of $25,000 and cost of goods sold of $100,000. Compute Johnson Company’s days’ payable outstanding.

Answer 1

Answer:

the days payable outstanding is 91.25 days

Explanation:

The computation of the days payable outstanding is  shown below:

Days' payable outstanding is

= (Accounts Payable ÷  Cost of goods sold) × total number of days in a year

= ($25,000 ÷ $100,00) × 365 days

= 91.25 days

We simply applied the above formula so that the correct value could come

And, the same is to be considered

Hence, the days payable outstanding is 91.25 days