Wardlow Sales, Inc.'s comparative income statements and balance sheets show the following selected information for 2016 and

Question:

Wardlow Sales, Inc.'s comparative income statements and balance sheets show the following selected information for 2016 and 2017:

__________________________________________________ 2017 _________ 2016

Cost of goods sold................................................................. $2,700,000 ...... $2,500,000

Average accounts payable...................................................... $ 300,000 ......... $ 250,000

Requirements

1. Calculate the company's accounts payable turnover and days payable outstanding (DPO) for 2016 and 2017.

2. On the basis of this computation alone, has the company's liquidity position improved or deteriorated during 2017?

Accounts Payable
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...