Question

In: Accounting

Suppose the following information was taken from the 2022 financial statements of FedEx Corporation, a major...

Suppose the following information was taken from the 2022 financial statements of FedEx Corporation, a major global transportation/delivery company.

(in millions)

2022

2021

Accounts receivable (gross)

$ 3,720

$ 4,540

Accounts receivable (net)

3,400

4,350

Allowance for doubtful accounts

320

190

Sales revenue

37,975

40,475

Total current assets

7,188

7,286


Answer each of the following questions.

(a)

Calculate the accounts receivable turnover and the average collection period for 2022 for FedEx. (Round answers to 1 decimal place, e.g. 12.5. Use 365 days for calculation.)

Accounts receivable turnover

 times

The average collection period for 2022

 days

Solutions

Expert Solution

(a)

For 2022

Accounts receivable (gross) , beginning = $4,540

Accounts receivable (gross) , ending= $3,720

Average Accounts receivable (gross) = (Accounts receivable (gross) , beginning + Accounts receivable (gross) , ending)/2

= (4,540+3,720)/2

= $4,130

Sales revenue = $37,975

Accounts receivable turnover = Sales revenue / Average Accounts receivable (gross)

= 37,975/4,130

= 9.2 times

The average collection period for 2022 = 365/Accounts receivable turnover

= 365/9.2

= 39.7 days

Accounts receivable turnover

 9.2 times

The average collection period for 2022

 39.7 days

Kindly give a positive rating if you are satisfied with this solution and please ask if you have any query.

Thanks

ekkarill92 answered 2 years ago
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