Exercise 8-14 Suppose the following information was taken from the 2017 financia

Question

Exercise 8-14 Suppose the following information was taken from the 2017 financial statements of FedEx Corporation, a major global transportation/delivery company. in millions 2017 2016 Accounts receivable (gross) Accounts receivable (net) Allowance for doubtful accounts Sales revenue Total current assets $3,6374,712 4,137 575 34,549 6,720 3,336 301 31,950 7,795 Answer each of the following questions. Calculate the accounts receivable turnover and the average collection period for 2017 for FedEx Corporation. (Round answers to 1 decimal place, e.g. 12.5. Use 365 days for calculation.) Accounts receivable turnover times The average collection period for 2017 days SHOW LIST OF ACCOUNTS LINK TO TEXT VIDEO: SIMILAR EXERCISE Is accounts receivable a material component of the company's total current assets?

Explanation / Answer

1) Accounts receivable turnover = Net sales /average account receivable Average account receivable = (opening + closing net account receivable)/2 (3336+4137)/2 3736.5 31,950/3736.50 8.6 times answer 2) Average collection period for 2017            = 365/8.6 42.4 days Accounts receivable turnover 8.6 times Average collection period 42.4 Days

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