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4 April, 22:56

Heritage, Inc., had a cost of goods sold of $68,314. At the end of the year, the accounts payable balance was $15,486. How long on average did it take the company to pay off its suppliers during the year

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  1. 4 April, 23:00
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    Heritage Inc. takes on average 83 days to pay off its suppliers during the years.

    Explanation:

    Trade payable days are the number of days in which company pays to its suppliers.

    Use following formula to calculate number of days:

    Trade Payable Days = (Trade Payable / Cost of goods sold) x 365

    Trade Payable Days = ($15,486 / $68,314) x 365

    Trade payable days = 82.74 days = 83 days (Rounded off to whole number)

    Heritage Inc. takes on average 83 days to pay off its suppliers during the years.
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