Exercise 8-14 (Part Level Submission) Suppose the following information was take

Question

Exercise 8-14 (Part Level Submission) 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 3,175 650 35,070 7,220 3,825 $4,842 4,069 773 36,219 6,808 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

Explanation / Answer

Accounts receivable turnover ratio = 9.68 Times

The Average Collection period for 2017 = 37.7 Days

Accounts receivable turnover ratio

Accounts receivable turnover ratio=Turn Over / Average net Accounts Receivable

= $ 35,070 / [ ($ 3,175 + $ 4,069 )/2 ]

= $ 35,070 / $ 3,622

= 9.68 Times

The Average Collection period for 2017

The Average Collection period           

= No.of.days in a year / Accounts receivable turnover ratio

= 365 Days / 9.68

= 37.7 Days

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