Determine the accounts payable days, Accounting Standards

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SQB Corporation reports sales of $10,000,000 for Year 2, with a gross profit margin of 40%.  20% of SQB's sales are on credit.    

 

Year 1

Year 2

Accounts receivable

$  150,000

$  170,000

Inventory

900,000

1,000,000

Accounts payable

1,100,000

1,200,000

Requirements:

1. Accounts receivable days outstanding at the end of Year 2 is (use year-end receivable balance and 360 days in a year):

2. Accounts payable days outstanding at the end of Year 2 is (use average accounts payable for the year and 360 days in a year):

3. Days' sales in inventory at the end of Year 2 is (use year-end inventory amount and 360 days in a year)


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