Accounts Payable A chain of appliance stores, APP Corporation, purchases inventory with a net price of...

Accounts Payable

A chain of appliance stores, APP Corporation, purchases inventory with a net price of $250,000 each day. The company purchases the inventory under the credit terms of 1/15, net 30. APP always takes the discount, but takes the full 15 days to pay its bills. What is the average accounts payable for APP? Round your answer to the nearest dollar.

Solutions

Expert Solution

The answer depends on whether APP uses gross method or net method to record accounts payable:

If gross method is used,

the average accounts payable = net price*days to pay the bill

=>250,000*15

=>3,750,000.

If net method is used,

the average accounts payable = net price *days to pay the bill * (1- discount)

=>250,000*15*(1-0.01)

=>3,712,500.

jeff jeffy answered 1 year ago

Next > < Previous

Related Solutions

A chain of appliance stores, APP Corporation, purchases inventory with a net price of $600,000 each...

A chain of appliance stores, APP Corporation, purchases inventory with a net price of $600,000 each day. The company purchases the inventory under the credit terms of 1/15, net 30. APP always takes the discount, but takes the full 15 days to pay its bills. What is the average accounts payable for APP? Round your answer to the nearest dollar.

A chain of appliance stores, APP Corporation, purchases inventory with a net price of $450,000 each...

A chain of appliance stores, APP Corporation, purchases inventory with a net price of $450,000 each day. The company purchases the inventory under the credit terms of 2/15, net 30. APP always takes the discount, but takes the full 15 days to pay its bills. What is the average accounts payable for APP?

1.) A chain of appliance stores, APP Corporation, purchases inventory with a net price of $450,000...

1.) A chain of appliance stores, APP Corporation, purchases inventory with a net price of $450,000 each day. The company purchases the inventory under the credit terms of 1/15, net 40. APP always takes the discount but takes the full 15 days to pay its bills. What is the average accounts payable for APP? Round your answer to the nearest dollar. 2.) Snider Industries sells on terms of 2/10, net 35. Total sales for the year are $600,000. Thirty percent...

A manager of a large chain of appliance stores is planning to conduct a pricing experiment...

A manager of a large chain of appliance stores is planning to conduct a pricing experiment to determine the price elasticity of the chain’s line of microwave ovens. He plans to measure sales for the month of February, raise prices by 12 percent on March 15, and then measure sales for the month of April. Each sales measurement would take into account the total monthly microwave oven sales for all of the stores in his chain. He has asked you...

Firm A purchases $150,000 in inventory using 40% cash and 60% Accounts Payable. Which of the...

Firm A purchases $150,000 in inventory using 40% cash and 60% Accounts Payable. Which of the following statements is false? Firm A's shareholder equity was unaffected Firm A's current assets decreased by $60,000 Firm A's inventory increased by $150,000 Firm A's liabilities increased by $90,000 2. A client purchases $200,000 worth of goods and pays 25% cash. Which of the following statements is true? Current assets increase by $200,000 Liabilities increase by $150,000 Shareholder’s equity increases by $50,000 Account receivable...

Purchases, Accounts Payable Subsidiary Account, and Accounts Payable Ledger Sterling Forest Landscaping designs and installs landscaping....

Purchases, Accounts Payable Subsidiary Account, and Accounts Payable Ledger Sterling Forest Landscaping designs and installs landscaping. The landscape designers and office staff use office supplies, while field supplies (rock, bark, etc.) are used in the actual landscaping. Purchases on account completed by Sterling Forest Landscaping during October are as follows: Oct. 2. Purchased office supplies on account from Meade Co., $3,560. 5. Purchased office equipment on account from Peach Computers Co., $5,120. 9. Purchased office supplies on account from Executive...

Purchases, Accounts Payable Subsidiary Account, and Accounts Payable Ledger Sterling Forest Landscaping designs and installs landscaping....

Purchases, Accounts Payable Subsidiary Account, and Accounts Payable Ledger Sterling Forest Landscaping designs and installs landscaping. The landscape designers and office staff use office supplies, while field supplies (rock, bark, etc.) are used in the actual landscaping. Purchases on account completed by Sterling Forest Landscaping during October are as follows: Oct. 2. Purchased office supplies on account from Meade Co., $400. Oct. 5. Purchased office equipment on account from Peach Computers Co., $3,980. Oct. 9. Purchased office supplies on account...

Purchases, Accounts Payable Subsidiary Account, and Accounts Payable Ledger Sterling Forest Landscaping designs and installs landscaping....

Purchases, Accounts Payable Subsidiary Account, and Accounts Payable Ledger Sterling Forest Landscaping designs and installs landscaping. The landscape designers and office staff use office supplies, while field supplies (rock, bark, etc.) are used in the actual landscaping. Purchases on account completed by Sterling Forest Landscaping during October are as follows: Oct. 2. Purchased office supplies on account from Meade Co., $5,200. 5. Purchased office equipment on account from Peach Computers Co., $7,480. 9. Purchased office supplies on account from Executive...

Explain how the accounts receivable, inventory, power and equipment, accounts payable, wages payable and long-term debt...

Explain how the accounts receivable, inventory, power and equipment, accounts payable, wages payable and long-term debt impacted cash flow from one year to the next. 200-word minimum.

Asset Liabilities and owners equity Cash 600 Accounts Payable 700 Inventory 80 Notes Payable 200 Accounts...

Asset Liabilities and owners equity Cash 600 Accounts Payable 700 Inventory 80 Notes Payable 200 Accounts Receivable 400 Current Maturing LTD 40 Fixed assets 1500 Stock 1300 Accumulated Depreciation (90) Retained Earnings 250 Total 2490 Total 2490 Use the following balance sheet for Delta Company to answer the following 3 questions. 1.Which of the following statements is accurate in regards to Delta's financial position? Delta's NWC suggests that solvency is a concern. Delta's NWC suggests that the firm has a...

Subjects