The Following Data Is Available for Tommy's Toys for the Years

question 36

Essay

The following data is available for Tommy's Toys for the years 2008 through 2011:
$\begin{array}{lcccc}& \underline{2011} & \underline{2010} & \underline{2009} & \underline{2008} \\\text { Cost of goods sold } & \$ 7,506 & \$ 7,646 & \$ 7,799 & \$ 7,815 \\\text { Accounts payable }& \$ 1,023 & \$ 1,022 & \$ 878 & \$ 896\end{array}$

A. Calculate the accounts payable turnover ratio for the following years:
1. 2011
2. 2010
3. 2009
B. Calculate the number of days it is taking Tommy's Toys to pay their vendors (assume a 365 day year):
1. 2011
2. 2010
3. 2009
C. Explain whether Tommy's Toys is doing a better job of paying their vendors in a timely manner.

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Definitions:

Single

A filing status for a taxpayer who is unmarried and does not qualify for other filing statuses like Head of Household.

Failure To File Penalty

A penalty imposed by tax authorities for not filing a required tax return by the due date.

Tax Liability

The total amount of tax that an individual or entity is legally obligated to pay to a taxing authority.

Remaining Tax

The portion of tax liability that remains unpaid after all payments and credits have been applied, effectively the balance due.