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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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hyderali230

Answer:

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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