Calculate the days payables outstanding for march

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Reference no: EM132060724

Problem

Wycliff Contractors, Inc. has the following monthly purchasing schedule and ending accounts payable.

	Dec.	Jan.	Feb.	Mar.	Apr.	May	June
Purchases	$400	$375	$350	$325	$400	$500	$650
Ending payables		342	320	297	345	430	555

A. Calculate the days payables outstanding for March, April, May, and June using quarterly purchases to calculate the average daily purchases.

B. What is your conclusion regarding the firm's payment behavior?

C. The following table shows the amount of payables remaining in successive months for purchases made during the January through June period of operations. Convert the table to a balance fraction matrix and discuss the firm's payment pattern as represented by the balance fraction table.

Accounts Payable Balances
	Purchases	Jan.	Feb.	Mar.	Apr.	May	June
Jan.	$375	$262	$75
Feb.	350		245	$70
Mar.	325			227	$65
Apr.	400				280	$80
May	500					350	$100
June	650						455
		NA	$320	$297	$345	$430	$555

D. What is your conclusion about the firm's payment pattern?

Reference no: EM132060724

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