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The following data are available for the current year for the Ben Jonson Company
The following data are available for the current year for the Ben Jonson Company. It uses a 365-day year when computing ratios. December 31, December 31 Year 2 Year 3 Net credit sales $6,205,000 Accounts receivable 335,000 $350,000 Inventory 870,000 960,000 Cost of goods sold 4,380,000 If the Ben Jonson Company's cash cycle for Year 2 is 51.40 days, its days' purchases in accounts payable equal Basic Calculator Time Value Tables 1 10 11 12 A. 71.11 days 13 B. 104.19 days. 15 16 c. 143.61 days 17 18 D. 40.81 days 19 20
Expert Solution
Days Collection period = 335000*365/6205000 = 19.71 days
Days Sales period = 870000*365/4380000 = 72.50 days
Days purchase in account payable = 19.71+72.50-51.40 = 40.81
So answer is d) 40.81 days
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