In 2013, Copia Company had current assets of $155,000 and current liabilities of $100,000, of which accounts
Question:
In 2013, Copia Company had current assets of $155,000 and current liabilities of $100,000, of which accounts payable were $65,000. Cost of goods sold was $425,000, merchandise inventory increased by $40,000, and accounts payable were $55,000 in the prior year. In 2014, Copia had current assets of $210,000 and current liabilities of $160,000, of which accounts payable were $75,000. Cost of goods sold was $475,000, and merchandise inventory decreased by $15,000. Calculate Copia’s working capital, payables turnover, and days’ payable for 2013 and 2014. Assess Copia’s liquidity and cash flows in relation to the change in payables turnover from 2013 to 2014.
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive...
Step by Step Answer:
Principles of Accounting
ISBN: 978-1133626985
12th edition
Authors: Belverd E. Needles, Marian Powers and Susan V. Crosson