eTextbook Gradebook ignment the amounts presented here are basic fnandial inform
ID: 2401093 • Letter: E
Question
eTextbook Gradebook ignment the amounts presented here are basic fnandial information (in milons) from the 2019 arnual reports of Nike and Adidas 17,942.4 $10,626.0 Allowance for doubtful accounts, beginning Allowance for doubitful accounts, ending 110 receivable balance (oross), beginning 2,924 1,730 Accounts receivable balance (gross), ending 2,962 1,5 Calculate the accounts recelivable turnover for both companies. (Round answers to 1 decional place, e.g. 12.5) receivable turnover Calculate the average collection period for both companies (Round atrsiwers to 1 decimal plce,ea. 12.5. Use 365 days for calculation) Average collection perlod Cick it you would Sike to Show Work for this question: Sr days Cortana. Ask meExplanation / Answer
Accounts Receivable turnover is calculated as follows
Net Credit Sales ÷ ((Beginning Accounts Receivable + Ending Accounts Receivable) / 2)
Calculation of beginning and ending accounts receivables
Nike
Addidas
Opening balance gross
$ 2,924.00
$ 1,730.00
Opening balance of Doubtful debts
$ 80.00
$ 120.00
Net Opening Balance
$ 2,844.00
$ 1,610.00
Closing balance gross
$ 2,962.00
$ 1,548.00
Closing balance of Doubtful debts
$ 110.00
$ 122.00
Net Closing Balance
$ 2,852.00
$ 1,426.00
Accounts receivable turnover
Average Receivables
$ 2,848.00
$ 1,518.00
Net sales
$ 17,942.40
$ 10,626.00
Accounts receivable turnover
6.3 times
7 times
Average Collection period
Average accounts receivable ÷ (Annual sales ÷ 365 days)
Nike
Addidas
Average Receivables
$ 2,848.00
$ 1,518.00
Annual credit sales
$ 17,942.40
$ 10,626.00
No of days in a year
365
365
Average Collection period
57.94
52.14
Average Collection period
58 days Approx
52 days Approx
Accounts Receivable turnover is calculated as follows
Net Credit Sales ÷ ((Beginning Accounts Receivable + Ending Accounts Receivable) / 2)
Calculation of beginning and ending accounts receivables
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