Days Payable outstanding (DPO): Days payable outstanding is the time in days which the company takes to pay off its accounts payable. Day's payable outstanding is calculated using the following formula: D a y ’ s p a y a b l e o u t s t a n d i n g = A c c o u n t s P a y a b l e * 365 C o s t o f S a l e s Requirement-1: To Calculate: Days Payable outstanding for Current Year

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Answer 1

Question

Chapter D, Problem 13E

To determine

Concept Introduction:

Days Payable outstanding (DPO):

Days payable outstanding is the time in days which the company takes to pay off its accounts payable. Day's payable outstanding is calculated using the following formula:

Day’s payable outstanding = Accounts Payable * 365Cost of Sales

Requirement-1:

To Calculate:

Days Payable outstanding for Current Year

Expert Solution

Answer to Problem 13E

Days Payable outstanding for Current Year is 25

Explanation of Solution

Days Payable outstanding for Current Year is calculated as follows:

$ Millions	Current Year
Accounts Payable (A)	$ 1,931
Cost of Goods Sold (B)	$ 28,164
*Days Payable Outstanding = (A365/B)**	25

To determine

Concept Introduction:

Days Payable outstanding (DPO):

Days payable outstanding is the time in days which the company takes to pay off its accounts payable. Day's payable outstanding is calculated using the following formula:

Day’s payable outstanding = Accounts Payable * 365Cost of Sales

Requirement-2:

To Calculate:

Reduction in Days Payable outstanding if accounts payables are reduced by 8%

Expert Solution

Answer to Problem 13E

Reduction in Days Payable outstanding if accounts payables are reduced by 8% shall be 2 days

Explanation of Solution

Reduction in Days Payable outstanding if accounts payables are reduced by 8% is calculated as follows:

Before Reduction in Accounts Payable:
$ Millions	Current Year
Accounts Payable (A)	$ 1,931
Cost of Goods Sold (B)	$ 28,164
*Days Payable Outstanding = (A365/B)**	25

After Reduction in Accounts Payable:
$ Millions	Current Year
Accounts Payable (A) (1931*92%)	$ 1,777
Cost of Goods Sold (B)	$ 28,164
*Days Payable Outstanding = (A365/B)**	23

Reduction in Days Payable Outstanding (25-23)	2

To determine

Concept Introduction:

Days Payable outstanding (DPO):

Days payable outstanding is the time in days which the company takes to pay off its accounts payable. Day's payable outstanding is calculated using the following formula:

Day’s payable outstanding = Accounts Payable * 365Cost of Sales

Requirement-3:

To Calculate:

Increase in Days Payable outstanding if accounts payables are increased by 8%

Expert Solution

Answer to Problem 13E

Increase in Days Payable outstanding if accounts payables are increased by 8% shall be 2 days

Explanation of Solution

Increase in Days Payable outstanding if accounts payables are increased by 8% is calculated as follows:

Before Increase in Accounts Payable:
$ Millions	Current Year
Accounts Payable (A)	$ 1,931
Cost of Goods Sold (B)	$ 28,164
*Days Payable Outstanding = (A365/B)**	25

After Increase in Accounts Payable:
$ Millions	Current Year
Accounts Payable (A) (1931*108%)	$ 2,085
Cost of Goods Sold (B)	$ 28,164
*Days Payable Outstanding = (A365/B)**	27

Reduction in Days Payable Outstanding (27-25)	2

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Answer 2

Question

Chapter D, Problem 13E

To determine

Concept Introduction:

Days Payable outstanding (DPO):

Days payable outstanding is the time in days which the company takes to pay off its accounts payable. Day's payable outstanding is calculated using the following formula:

Day’s payable outstanding = Accounts Payable * 365Cost of Sales

Requirement-1:

To Calculate:

Days Payable outstanding for Current Year

Expert Solution

Answer to Problem 13E

Days Payable outstanding for Current Year is 25

Explanation of Solution

Days Payable outstanding for Current Year is calculated as follows:

$ Millions	Current Year
Accounts Payable (A)	$ 1,931
Cost of Goods Sold (B)	$ 28,164
*Days Payable Outstanding = (A365/B)**	25

To determine

Concept Introduction:

Days Payable outstanding (DPO):

Days payable outstanding is the time in days which the company takes to pay off its accounts payable. Day's payable outstanding is calculated using the following formula:

Day’s payable outstanding = Accounts Payable * 365Cost of Sales

Requirement-2:

To Calculate:

Reduction in Days Payable outstanding if accounts payables are reduced by 8%

Expert Solution

Answer to Problem 13E

Reduction in Days Payable outstanding if accounts payables are reduced by 8% shall be 2 days

Explanation of Solution

Reduction in Days Payable outstanding if accounts payables are reduced by 8% is calculated as follows:

Before Reduction in Accounts Payable:
$ Millions	Current Year
Accounts Payable (A)	$ 1,931
Cost of Goods Sold (B)	$ 28,164
*Days Payable Outstanding = (A365/B)**	25

After Reduction in Accounts Payable:
$ Millions	Current Year
Accounts Payable (A) (1931*92%)	$ 1,777
Cost of Goods Sold (B)	$ 28,164
*Days Payable Outstanding = (A365/B)**	23

Reduction in Days Payable Outstanding (25-23)	2

To determine

Concept Introduction:

Days Payable outstanding (DPO):

Days payable outstanding is the time in days which the company takes to pay off its accounts payable. Day's payable outstanding is calculated using the following formula:

Day’s payable outstanding = Accounts Payable * 365Cost of Sales

Requirement-3:

To Calculate:

Increase in Days Payable outstanding if accounts payables are increased by 8%

Expert Solution

Answer to Problem 13E

Increase in Days Payable outstanding if accounts payables are increased by 8% shall be 2 days

Explanation of Solution

Increase in Days Payable outstanding if accounts payables are increased by 8% is calculated as follows:

Before Increase in Accounts Payable:
$ Millions	Current Year
Accounts Payable (A)	$ 1,931
Cost of Goods Sold (B)	$ 28,164
*Days Payable Outstanding = (A365/B)**	25

After Increase in Accounts Payable:
$ Millions	Current Year
Accounts Payable (A) (1931*108%)	$ 2,085
Cost of Goods Sold (B)	$ 28,164
*Days Payable Outstanding = (A365/B)**	27

Reduction in Days Payable Outstanding (27-25)	2

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Answer 3

Question

Chapter D, Problem 13E

To determine

Concept Introduction:

Days Payable outstanding (DPO):

Days payable outstanding is the time in days which the company takes to pay off its accounts payable. Day's payable outstanding is calculated using the following formula:

Day’s payable outstanding = Accounts Payable * 365Cost of Sales

Requirement-1:

To Calculate:

Days Payable outstanding for Current Year

Expert Solution

Answer to Problem 13E

Days Payable outstanding for Current Year is 25

Explanation of Solution

Days Payable outstanding for Current Year is calculated as follows:

$ Millions	Current Year
Accounts Payable (A)	$ 1,931
Cost of Goods Sold (B)	$ 28,164
*Days Payable Outstanding = (A365/B)**	25

To determine

Concept Introduction:

Days Payable outstanding (DPO):

Days payable outstanding is the time in days which the company takes to pay off its accounts payable. Day's payable outstanding is calculated using the following formula:

Day’s payable outstanding = Accounts Payable * 365Cost of Sales

Requirement-2:

To Calculate:

Reduction in Days Payable outstanding if accounts payables are reduced by 8%

Expert Solution

Answer to Problem 13E

Reduction in Days Payable outstanding if accounts payables are reduced by 8% shall be 2 days

Explanation of Solution

Reduction in Days Payable outstanding if accounts payables are reduced by 8% is calculated as follows:

Before Reduction in Accounts Payable:
$ Millions	Current Year
Accounts Payable (A)	$ 1,931
Cost of Goods Sold (B)	$ 28,164
*Days Payable Outstanding = (A365/B)**	25

After Reduction in Accounts Payable:
$ Millions	Current Year
Accounts Payable (A) (1931*92%)	$ 1,777
Cost of Goods Sold (B)	$ 28,164
*Days Payable Outstanding = (A365/B)**	23

Reduction in Days Payable Outstanding (25-23)	2

To determine

Concept Introduction:

Days Payable outstanding (DPO):

Days payable outstanding is the time in days which the company takes to pay off its accounts payable. Day's payable outstanding is calculated using the following formula:

Day’s payable outstanding = Accounts Payable * 365Cost of Sales

Requirement-3:

To Calculate:

Increase in Days Payable outstanding if accounts payables are increased by 8%

Expert Solution

Answer to Problem 13E

Increase in Days Payable outstanding if accounts payables are increased by 8% shall be 2 days

Explanation of Solution

Increase in Days Payable outstanding if accounts payables are increased by 8% is calculated as follows:

Before Increase in Accounts Payable:
$ Millions	Current Year
Accounts Payable (A)	$ 1,931
Cost of Goods Sold (B)	$ 28,164
*Days Payable Outstanding = (A365/B)**	25

After Increase in Accounts Payable:
$ Millions	Current Year
Accounts Payable (A) (1931*108%)	$ 2,085
Cost of Goods Sold (B)	$ 28,164
*Days Payable Outstanding = (A365/B)**	27

Reduction in Days Payable Outstanding (27-25)	2

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Answer 4

Question

Chapter D, Problem 13E

To determine

Concept Introduction:

Days Payable outstanding (DPO):

Days payable outstanding is the time in days which the company takes to pay off its accounts payable. Day's payable outstanding is calculated using the following formula:

Day’s payable outstanding = Accounts Payable * 365Cost of Sales

Requirement-1:

To Calculate:

Days Payable outstanding for Current Year

Expert Solution

Answer to Problem 13E

Days Payable outstanding for Current Year is 25

Explanation of Solution

Days Payable outstanding for Current Year is calculated as follows:

$ Millions	Current Year
Accounts Payable (A)	$ 1,931
Cost of Goods Sold (B)	$ 28,164
*Days Payable Outstanding = (A365/B)**	25

To determine

Concept Introduction:

Days Payable outstanding (DPO):

Days payable outstanding is the time in days which the company takes to pay off its accounts payable. Day's payable outstanding is calculated using the following formula:

Day’s payable outstanding = Accounts Payable * 365Cost of Sales

Requirement-2:

To Calculate:

Reduction in Days Payable outstanding if accounts payables are reduced by 8%

Expert Solution

Answer to Problem 13E

Reduction in Days Payable outstanding if accounts payables are reduced by 8% shall be 2 days

Explanation of Solution

Reduction in Days Payable outstanding if accounts payables are reduced by 8% is calculated as follows:

Before Reduction in Accounts Payable:
$ Millions	Current Year
Accounts Payable (A)	$ 1,931
Cost of Goods Sold (B)	$ 28,164
*Days Payable Outstanding = (A365/B)**	25

After Reduction in Accounts Payable:
$ Millions	Current Year
Accounts Payable (A) (1931*92%)	$ 1,777
Cost of Goods Sold (B)	$ 28,164
*Days Payable Outstanding = (A365/B)**	23

Reduction in Days Payable Outstanding (25-23)	2

To determine

Concept Introduction:

Days Payable outstanding (DPO):

Days payable outstanding is the time in days which the company takes to pay off its accounts payable. Day's payable outstanding is calculated using the following formula:

Day’s payable outstanding = Accounts Payable * 365Cost of Sales

Requirement-3:

To Calculate:

Increase in Days Payable outstanding if accounts payables are increased by 8%

Expert Solution

Answer to Problem 13E

Increase in Days Payable outstanding if accounts payables are increased by 8% shall be 2 days

Explanation of Solution

Increase in Days Payable outstanding if accounts payables are increased by 8% is calculated as follows:

Before Increase in Accounts Payable:
$ Millions	Current Year
Accounts Payable (A)	$ 1,931
Cost of Goods Sold (B)	$ 28,164
*Days Payable Outstanding = (A365/B)**	25

After Increase in Accounts Payable:
$ Millions	Current Year
Accounts Payable (A) (1931*108%)	$ 2,085
Cost of Goods Sold (B)	$ 28,164
*Days Payable Outstanding = (A365/B)**	27

Reduction in Days Payable Outstanding (27-25)	2

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Answer 5

Chapter D, Problem 13E

To determine

Concept Introduction:

Days Payable outstanding (DPO):

Days payable outstanding is the time in days which the company takes to pay off its accounts payable. Day's payable outstanding is calculated using the following formula:

Day’s payable outstanding = Accounts Payable * 365Cost of Sales

Requirement-1:

To Calculate:

Days Payable outstanding for Current Year

Expert Solution

Answer to Problem 13E

Days Payable outstanding for Current Year is 25

Explanation of Solution

Days Payable outstanding for Current Year is calculated as follows:

$ Millions	Current Year
Accounts Payable (A)	$ 1,931
Cost of Goods Sold (B)	$ 28,164
*Days Payable Outstanding = (A365/B)**	25

To determine

Concept Introduction:

Days Payable outstanding (DPO):

Days payable outstanding is the time in days which the company takes to pay off its accounts payable. Day's payable outstanding is calculated using the following formula:

Day’s payable outstanding = Accounts Payable * 365Cost of Sales

Requirement-2:

To Calculate:

Reduction in Days Payable outstanding if accounts payables are reduced by 8%

Expert Solution

Answer to Problem 13E

Reduction in Days Payable outstanding if accounts payables are reduced by 8% shall be 2 days

Explanation of Solution

Reduction in Days Payable outstanding if accounts payables are reduced by 8% is calculated as follows:

Before Reduction in Accounts Payable:
$ Millions	Current Year
Accounts Payable (A)	$ 1,931
Cost of Goods Sold (B)	$ 28,164
*Days Payable Outstanding = (A365/B)**	25

After Reduction in Accounts Payable:
$ Millions	Current Year
Accounts Payable (A) (1931*92%)	$ 1,777
Cost of Goods Sold (B)	$ 28,164
*Days Payable Outstanding = (A365/B)**	23

Reduction in Days Payable Outstanding (25-23)	2

To determine

Concept Introduction:

Days Payable outstanding (DPO):

Days payable outstanding is the time in days which the company takes to pay off its accounts payable. Day's payable outstanding is calculated using the following formula:

Day’s payable outstanding = Accounts Payable * 365Cost of Sales

Requirement-3:

To Calculate:

Increase in Days Payable outstanding if accounts payables are increased by 8%

Expert Solution

Answer to Problem 13E

Increase in Days Payable outstanding if accounts payables are increased by 8% shall be 2 days

Explanation of Solution

Increase in Days Payable outstanding if accounts payables are increased by 8% is calculated as follows:

Before Increase in Accounts Payable:
$ Millions	Current Year
Accounts Payable (A)	$ 1,931
Cost of Goods Sold (B)	$ 28,164
*Days Payable Outstanding = (A365/B)**	25

After Increase in Accounts Payable:
$ Millions	Current Year
Accounts Payable (A) (1931*108%)	$ 2,085
Cost of Goods Sold (B)	$ 28,164
*Days Payable Outstanding = (A365/B)**	27

Reduction in Days Payable Outstanding (27-25)	2

Answer 6

Chapter D, Problem 13E

To determine

Concept Introduction:

Days Payable outstanding (DPO):

Days payable outstanding is the time in days which the company takes to pay off its accounts payable. Day's payable outstanding is calculated using the following formula:

Day’s payable outstanding = Accounts Payable * 365Cost of Sales

Requirement-1:

To Calculate:

Days Payable outstanding for Current Year

Expert Solution

Answer to Problem 13E

Days Payable outstanding for Current Year is 25

Explanation of Solution

Days Payable outstanding for Current Year is calculated as follows:

$ Millions	Current Year
Accounts Payable (A)	$ 1,931
Cost of Goods Sold (B)	$ 28,164
*Days Payable Outstanding = (A365/B)**	25

Answer 7

Chapter D, Problem 13E

To determine

Concept Introduction:

Days Payable outstanding (DPO):

Days payable outstanding is the time in days which the company takes to pay off its accounts payable. Day's payable outstanding is calculated using the following formula:

Day’s payable outstanding = Accounts Payable * 365Cost of Sales

Requirement-1:

To Calculate:

Days Payable outstanding for Current Year

Answer 8

Expert Solution

Answer to Problem 13E

Days Payable outstanding for Current Year is 25

Answer 9

Expert Solution

Answer 10

Expert Solution

Answer 11

Expert Solution

Answer 12

Explanation of Solution

Days Payable outstanding for Current Year is calculated as follows:

$ Millions	Current Year
Accounts Payable (A)	$ 1,931
Cost of Goods Sold (B)	$ 28,164
*Days Payable Outstanding = (A365/B)**	25

Answer 13

To determine

Concept Introduction:

Days Payable outstanding (DPO):

Days payable outstanding is the time in days which the company takes to pay off its accounts payable. Day's payable outstanding is calculated using the following formula:

Day’s payable outstanding = Accounts Payable * 365Cost of Sales

Requirement-2:

To Calculate:

Reduction in Days Payable outstanding if accounts payables are reduced by 8%

Expert Solution

Answer to Problem 13E

Reduction in Days Payable outstanding if accounts payables are reduced by 8% shall be 2 days

Explanation of Solution

Reduction in Days Payable outstanding if accounts payables are reduced by 8% is calculated as follows:

Before Reduction in Accounts Payable:
$ Millions	Current Year
Accounts Payable (A)	$ 1,931
Cost of Goods Sold (B)	$ 28,164
*Days Payable Outstanding = (A365/B)**	25

After Reduction in Accounts Payable:
$ Millions	Current Year
Accounts Payable (A) (1931*92%)	$ 1,777
Cost of Goods Sold (B)	$ 28,164
*Days Payable Outstanding = (A365/B)**	23

Reduction in Days Payable Outstanding (25-23)	2

Answer 14

To determine

Concept Introduction:

Days Payable outstanding (DPO):

Days payable outstanding is the time in days which the company takes to pay off its accounts payable. Day's payable outstanding is calculated using the following formula:

Day’s payable outstanding = Accounts Payable * 365Cost of Sales

Requirement-2:

To Calculate:

Reduction in Days Payable outstanding if accounts payables are reduced by 8%

Answer 15

Expert Solution

Answer to Problem 13E

Reduction in Days Payable outstanding if accounts payables are reduced by 8% shall be 2 days

Answer 16

Expert Solution

Answer 17

Expert Solution

Answer 18

Expert Solution

Answer 19

Explanation of Solution

Reduction in Days Payable outstanding if accounts payables are reduced by 8% is calculated as follows:

Before Reduction in Accounts Payable:
$ Millions	Current Year
Accounts Payable (A)	$ 1,931
Cost of Goods Sold (B)	$ 28,164
*Days Payable Outstanding = (A365/B)**	25

After Reduction in Accounts Payable:
$ Millions	Current Year
Accounts Payable (A) (1931*92%)	$ 1,777
Cost of Goods Sold (B)	$ 28,164
*Days Payable Outstanding = (A365/B)**	23

Reduction in Days Payable Outstanding (25-23)	2

Answer 20

To determine

Concept Introduction:

Days Payable outstanding (DPO):

Days payable outstanding is the time in days which the company takes to pay off its accounts payable. Day's payable outstanding is calculated using the following formula:

Day’s payable outstanding = Accounts Payable * 365Cost of Sales

Requirement-3:

To Calculate:

Increase in Days Payable outstanding if accounts payables are increased by 8%

Expert Solution

Answer to Problem 13E

Increase in Days Payable outstanding if accounts payables are increased by 8% shall be 2 days

Explanation of Solution

Increase in Days Payable outstanding if accounts payables are increased by 8% is calculated as follows:

Before Increase in Accounts Payable:
$ Millions	Current Year
Accounts Payable (A)	$ 1,931
Cost of Goods Sold (B)	$ 28,164
*Days Payable Outstanding = (A365/B)**	25

After Increase in Accounts Payable:
$ Millions	Current Year
Accounts Payable (A) (1931*108%)	$ 2,085
Cost of Goods Sold (B)	$ 28,164
*Days Payable Outstanding = (A365/B)**	27

Reduction in Days Payable Outstanding (27-25)	2

Answer 21

To determine

Concept Introduction:

Days Payable outstanding (DPO):

Days payable outstanding is the time in days which the company takes to pay off its accounts payable. Day's payable outstanding is calculated using the following formula:

Day’s payable outstanding = Accounts Payable * 365Cost of Sales

Requirement-3:

To Calculate:

Increase in Days Payable outstanding if accounts payables are increased by 8%

Answer 22

Expert Solution

Answer to Problem 13E

Increase in Days Payable outstanding if accounts payables are increased by 8% shall be 2 days

Answer 23

Expert Solution

Answer 24

Expert Solution

Answer 25

Expert Solution

Answer 26

Explanation of Solution

Increase in Days Payable outstanding if accounts payables are increased by 8% is calculated as follows:

Before Increase in Accounts Payable:
$ Millions	Current Year
Accounts Payable (A)	$ 1,931
Cost of Goods Sold (B)	$ 28,164
*Days Payable Outstanding = (A365/B)**	25

After Increase in Accounts Payable:
$ Millions	Current Year
Accounts Payable (A) (1931*108%)	$ 2,085
Cost of Goods Sold (B)	$ 28,164
*Days Payable Outstanding = (A365/B)**	27

Reduction in Days Payable Outstanding (27-25)	2