Brief Exercise 8-15 (Part Level Submission) Canfor Corporation reported the foll

Question

Brief Exercise 8-15 (Part Level Submission) Canfor Corporation reported the following selected information (in millions) for the three years ended December 31, 2015, 2014, and 2013: 2015 2014 2013 $196.3 $95.0 $115.3 Trade receivables (gross) Allowance for doubtful accounts Net sales 4.5 3.7 2.7 3,925.3 3,347.6 3,194.9 Calculate Canfor's receivables turnover and average collection period for 2015 and 2014. (Round answers to 1 decimal place, e.g. 52.5.) 2015 2014 Receivables turnover times times Average collection period days days

Explanation / Answer

Solution a:

Computation of Receivables Turnover and Average collection period Particulars 2015 2014 Beginning Accounts Receivables $95.00 $115.30 Ending accounts receivables $196.30 $95.00 Average Accounts Receivables [(Ending receivables + Beginning Receivables) / 2] $145.65 $105.15 Net Sales $3,925.30 $3,347.60 Receivables Turnover (Net Sales / Average Accounts Receivables) (In times) 27.0 31.8 Average collection period (Nos of days in a year / Accounts receivables turnover) (in days) 13.5 11.5

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