Exercise 8-14 (Part Level Submission) (in millions) 2017 2016 $ 3,773 $ 4,675 3,

Question

Exercise 8-14 (Part Level Submission)

(in millions)

2017

2016

$ 3,773

$ 4,675

3,638

4,358

135

317

33,080

41,218

7,196

7,502

(a)

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)

$ 3,773

$ 4,675

Accounts receivable (net)

3,638

4,358

Allowance for doubtful accounts

135

317

Sales revenue

33,080

41,218

Total current assets

7,196

7,502

Answer each of the following questions.

Explanation / Answer

average receivable turnover = sales / average net receivables

here.

sales= $33,080.

average accounts receivable (net) = (3638 + 4358) / 2

=> $3998.

accounts receivable turnover = $33,080 / 3998

=>8.3times .............(rounded to one decimals place).

average collection period = 365 days / accounts receivable turnover

=>365 / 8.3

=>44.0 days...(rounded to one decimals)

Accounts receivable turnover 8.3 times The average collection period for 2017 44.0 days

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