Steele Fitness Products has the following partial list of account balances at year-end December 31, 2022:
Accounts payable $ 1,800
Accounts receivable 4,600
Cost of goods sold 15,000
Cash 23,000
Taxes payable 10,000
Land 25,000
Notes payable (due in 6 months) 1,000
Salaries payable 900
Inventory 4,300
Additional information: The accounts payable balance at the end of the prior year was $3,000.
Required:
A. Determine the following items:
1. Current assets
2. Current liabilities
3. Working capital
4. Accounts payable turnover ratio
5. Average age of accounts payable
B. Assume that cash is used at December 31, 2022, to pay the entire balance of accounts payable.
Determine the revised amounts from part (A) above for the following items:
1. Current assets
2. Current liabilities
3. Working capital
4. Accounts payable turnover ratio
5. Average age of accounts payable
C. Comment on the effect of paying accounts payable at year-end with regard to working capital and
accounts payable management.