The balance of LandyLandy Corporation's accounts payable at the beginning of the most recent year was $ 50 comma 000$50,000. At the end of the year, the accounts payable balance was $ 54 comma 000$54,000. Landy'sLandy's sales revenue for the year was $ 3 comma 105 comma 000$3,105,000, while its cost of goods sold for the year was $ 1 comma 508 comma 000$1,508,000. Calculate Landy'sLandy's days' payable outstanding (DPO) for the year. Assume inventory levels are constant throughout the year. If the credit terms from Landy'sLandy's suppliers are n/30, how would you interpret Landy'sLandy's DPO? (Round the DPO to two decimal places, X. XX.)

Explanation:

In the event that Inventory level is consistent consistently ,it implies starting stock and consummation stock are same in this way Purchase is equivalents to cost of merchandise sold = 1508000  

Average accounts payable =[Beginning payable +ending payable ]/2

= [50000+ 54000]/2  

= 52000  

days' payable outstanding = 365 *Average accounts payable /cost of goods sold

= 365 * 52000/1508000  

= 12.59 days  

The days payable exceptional estimates normal number of time organization takes to pay to its providers .in the given circumstance LandyCorporation have 30 days of time to pay to its provider anyway the equivalent is paid withing 13 days (approx) it implies LandyCorporation can't utilize credit office accessible (convey assets ).

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