Barnacle Sales, Inc.’s, comparative income statements and balance sheets show the following selected information for 2017 and 2018:

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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2017 2018 Cost of goods sold.. Ending inventory. Beginning inventory Average accounts payable . $2,850,000 $ 800,000 $ 600,000 $ 305,000 $2,700,000 $ 600,000 $ 400,000 $ 255,000