(Learning Objective 2: Analyze accounts payable turnover) Barnacle Sales, Inc.’s,comparative income statements and balance sheets show the following selected information for2017 and 2018:2018$2,850,000$ 800,000$ 600,000$ 305,0002017$2,700,000$ 600,000$ 400,000$ 255,000Cost of goods sold.......................................................Ending inventory.........................................................Beginning inventory ....................................................Average accounts payable ...........................................Requirements1. Calculate the company’s accounts payable turnover and days’ payable outstanding (DPO)for 2017 and 2018.2. On the basis of this computation alone, has the company’s liquidity position improved ordeteriorated during 2018?
(Learning Objective 2: Analyze accounts payable turnover) Barnacle Sales, Inc.’s,
comparative income statements and balance sheets show the following selected information for
2017 and 2018:
2018
$2,850,000
$ 800,000
$ 600,000
$ 305,000
2017
$2,700,000
$ 600,000
$ 400,000
$ 255,000
Cost of goods sold.......................................................
Ending inventory.........................................................
Beginning inventory ....................................................
Average accounts payable ...........................................
Requirements
1. Calculate the company’s accounts payable turnover and days’ payable outstanding (DPO)
for 2017 and 2018.
2. On the basis of this computation alone, has the company’s liquidity position improved or
deteriorated during 2018?
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