Aggarwal Inc

question 8

Multiple Choice

Aggarwal Inc.buys on terms of 2/10,net 30,and it always pays on the 30th day.The CFO calculates that the average amount of costly trade credit carried is $375,000.What is the firm's average accounts payable balance? Assume a 365-day year.

• A)$458,160
• B)$482,273
• C)$507,656
• D)$534,375
• E)$562,500

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Definitions:

Additional-Paid In Capital

The amount of money paid by investors above the par value of the shares, also known as share premium.

Financing Sources

Various methods a company uses to raise capital or funds, including debt financing, equity financing, and internal generated funds.

Total Assets

The sum of all assets owned by an entity, including both current and noncurrent assets, as reported on the balance sheet.

Purchasing Supplies

The act of obtaining materials, goods, or tools needed to operate a business or complete a task.