9 Receivables.

9 Receivables

After studying this chapter, you should be able to: Describe the common classifications of receivables. Describe the nature of and the accounting for uncollectible receivables. Describe the direct write-off method of accounting for uncollectible receivables.

After studying this chapter, you should be able to: Describe the allowance method of accounting for uncollectible receivables. Compare the direct write-off and allowance methods of accounting for uncollectible accounts.

After studying this chapter, you should be able to: Describe the nature, characteristics, and accounting for notes receivables. Describe the reporting of receivables on the balance sheet.

Describe the common classifications of receivables.
9-1 Objective 1 Describe the common classifications of receivables.

Classification of Receivables 9-1 The term receivables includes all money claims against other entities, including people, business firms, and other organizations.

Classification of Receivables
Accounts Receivable – used for selling merchandise or services on credit, and normally expected to be collected in a relatively short period. Notes Receivable – used to grant credit on the basis of a formal instrument of credit, called a promissory note. Other Receivables – interest receivable, taxes receivable, and receivables from officers or employees.

Accounts Receivable 9-1 Accounts receivable are normally expected to be collected within a relatively short period, such as 30 or 60 days.

Notes Receivable 9-1 Notes receivable are amounts that customers owe for which a formal, written instrument of credit has been issued.

Other Receivables 9-1 Other receivables expected to be collected within one year are classified as current assets. If collection is expected beyond one year, these receivables are classified as noncurrent assets and reported under the caption Investments.

9-2 Objective 2 Describe the nature of and the accounting for uncollectible receivables.

9-2 Companies often sell their receivables to other companies. This transaction is called factoring the receivables, and the buyer of the receivables is called a factor.

Uncollectible Receivables 9-2 There are two methods of accounting for receivables that appear to be uncollectible: the direct write off method and the allowance method.

9-2 The direct write off method records bad debt expense only when an account is judged to be worthless. The allowance method records bad debt expense by estimating uncollectible accounts at the end of the accounting period.

9-3 Objective 3 Describe the direct write-off method of accounting for uncollectible receivables.

Accounting for Uncollectible Accounts Receivable
The Direct Write-Off Method This method is not consistent with the matching principle. Accounts that prove to be uncollectible are written off in the year they become worthless. Bad Debt Expense is debited and Accounts Receivable is credited for each such transaction.

Direct Write-Off Method 9-3 On May 10, a $4,200 accounts receivable from D. L. Ross has been determined to be uncollectible. May 10 Bad Debt Expense Accounts Receivable—D. L. Ross 15

The amount written off is later collected on November 21.
9-3 The amount written off is later collected on November 21. Nov. 21 Accounts Receivable—D. L. Ross Bad Debt Expense 21 Cash Accounts Receivable—D. L. Ross 16

Direct Write-Off Method Example
On January 23, TechCom determines it cannot collect $520 from Jack Kent, a credit customer.

Direct Write-Off Method Example
If Jack Kent later pays the $520, the previous entry is simply reversed and the cash collection is recorded.

9-3 Example Exercise 9-1 Journalize the following transactions using the direct write-off method of accounting for uncollectible receivables. July 9 Received $1,200 from Jay Burke and wrote off the remainder owed of $3,900 as uncollectible. Oct. 11 Reinstated the account of Jay Burke and received $3,900 cash in full payment. 17

Accounts Receivable—Jay Burke 5,100
9-3 Follow My Example 9-1 July 9 Cash 1,200 Bad Debt Expense 3,900 Accounts Receivable—Jay Burke 5,100 Oct. 11 Accounts Receivable—Jay Burke 3,900 Bad Debt Expense 3,900 11 Cash 3,900 Accounts Receivable—Jay Burke 3,900 18 For Practice: PE 9-1A, PE 9-1B

9-4 Objective 4 Describe the allowance method of accounting for uncollectible receivables.

Accounting for Uncollectible Accounts Receivable
The Allowance Method This method is consistent with the matching principle. Management makes an estimate each year of the portion of accounts receivable that may not be collectible. Bad Debt Expense is debited and Allowance for Doubtful Accounts is credited. Actual accounts that prove to be uncollectible are debited to Allowance for Doubtful Accounts and credited to Accounts Receivable.

This is a contra-asset account.
Allowance Method At the end of each period, estimate total bad debts expected to be realized from that period’s sales. This is a contra-asset account.

Allowance Method 9-4 On December 31, ExTone Company estimates that a total of $40,000 of the $1,000,000 balance in her company’s Accounts Receivable will eventually be uncollectible. Dec Bad Debt Expense Allowance for Doubtful Accounts Uncollectible accounts estimate. 20

Net Realizable Value 9-4 The net amount that is expected to be collected, $960,000 ($1,000,000 – $40,000), is called the net realizable value (NRV). The adjusting entry reduces receivables to the NRV and matches uncollectible expenses with revenues.

9-4 On January 21, John Parker’s account totaling $6,000 is written off because it is uncollectible. Jan. 21 Allowance for Doubtful Accounts Accounts Receivable—John Parker To write off the uncollectible account. 22

9-4 23

9-4 During 2008, ExTone Company writes off $36,750 of uncollectible accounts, including the $6,000 account of John Parker. After posting all entries to write-off uncollectible amounts, the Allowance for Doubtful Accounts will have a credit balance of $3,250 ($40,000 – $36,750).

ALLOWANCE FOR DOUBTFUL ACCOUNTS
9-4 ALLOWANCE FOR DOUBTFUL ACCOUNTS { Jan. 1, 2008 Bal. 40,000 Total accounts written off $36,750 Jan. 21 6,000 Feb ,900 “ “ Dec. 31 Unadjusted bal 3,250 25

9-4 If ExTone Company had written off $44,100 in accounts receivable during 2008, the Allowance for Doubtful Accounts would have a debit balance of $4,100.

9-4 ALLOWANCE FOR DOUBTFUL ACCOUNTS { Jan. 1, 2008 Bal. 40,000 Total accounts written off $44,100 Jan. 21 6,000 Feb ,900 “ “ Dec. 31 Unadjusted bal 4,100 27

Collecting a Written-Off Account 9-4 Nancy Smith’s account of $5,000 which was written off on April 2 is later collected on June 10. Two entries are needed: one to reinstate Nancy Smith’s account and a second to record receipt of the cash.

Entry 1: Reinstate the account.
9-4 Entry 1: Reinstate the account. June 10 Accounts Receivable—Nancy Smith Allowance for Doubtful Accounts To reinstate the account written off on Jan. 21. 29

Entry 2: Record collection of cash.
9-4 Entry 2: Record collection of cash. June 10 Cash Accounts Receivable—Nancy Smith Collection of written-off account. 30

9-4 Example Exercise 9-2 Journalize the following transactions using the allowance method of accounting for uncollectible receivables. July 9 Received $1,200 from Jay Burke and wrote off the remainder owed of $3,900 as uncollectible. Oct. 11 Reinstated the account of Jay Burke and received $3,900 cash in full payment. 31

Allowance for Doubtful Accounts 3,900
9-4 Follow My Example 9-2 July 9 Cash 1,200 Allowance for Doubtful Accounts 3,900 Accounts Receivable—Jay Burke 5,100 Oct. 11 Accounts Receivable—Jay Burke 3,900 Allowance for Doubtful Accounts 3,900 11 Cash 3,900 Accounts Receivable—Jay Burke 3,900 32 For Practice: PE 9-2A, PE 9-2B

Estimate based on a percentage of sales.
Estimating Uncollectibles 9-4 The allowance method uses two ways to estimate the amount debited to Bad Debt Expense. Estimate based on a percentage of sales. Estimate based on analysis of receivables.

Estimating Bad Debts Expense
Two Methods Percent of Sales Method Accounts Receivable Methods Percent of Accounts Receivable Aging of Accounts Receivable Method

Estimating Uncollectible Accounts Expense
The allowance method uses two ways to estimate the amount debited to Bad Debt Expense. 1. Estimate based on a percentage of sales. If credit sales for the period are $300,000 and it is estimated that 1% will be uncollectible, the Uncollectible Accounts Expense is $3,000. 2. Estimate based on analysis of receivables. If it is estimated that $3,390 of the receivables will be uncollectible and the Allowance for Uncollectible Accounts is $510, the Uncollectible Accounts Expense is $2,880 ($3,390 – $510).

Methods to Estimate Bad Debts
Exh. 10.13 Methods to Estimate Bad Debts % of Sales Emphasis on Matching Sales Bad Debts Exp. Income Statement Focus % of Receivables Emphasis on Realizable Value Aging of Receivables Accts. Rec. All. for Doubtful Accts. Balance Sheet Focus

Percent of Sales Method
Bad debts expense is computed as follows:

Percent of Sales Method Example
MusicLand has credit sales of $400,000 in Musicland estimates 0.6% of credit sales are uncollectible. What is Bad Debts Expense for 2002?

Percent of Sales Method Example
MusicLand computes estimated Bad Debts Expense of $2,400.

Percent of Accounts Receivable Method
Compute the estimate of the Allowance for Doubtful Accounts. Bad Debts Expense is computed as:

Percent of Accounts Receivable Example
MusicLand has $50,000 in Accounts Receivable and a $200 credit balance in Allowance for Doubtful Accounts on December 31, Past experience suggests that 5% of receivables are uncollectible. What is MusicLand’s Bad Debts Expense for 2002?

Percent of Accounts Receivable Example
Desired balance in Allowance for Doubtful Accounts.

Aging of Accounts Receivable Method
Year-end Accounts Receivable is broken down into age classifications. Each age grouping has a different likelihood of being uncollectible. Compute a separate allowance for each age grouping.

Aging of Accounts Receivable Example

Aging of Accounts Receivable Example
MusicLand’s unadjusted balance in the allowance account is $200. Per the previous computation, the desired balance is $2,290.

Accounts Receivable Aging and Uncollectibles
Not Days Past Due Past over Customer Balance Due Ashby & Co. $ $ 150 B. T. Barr $ 350 $260 Brock Co. 470 $ 470 Saxon Woods Co Total $86,300 $75,000 $4,000 $3,100 $1,900 $1,200 $800 $300 Total accounts receivable shown by age.

Not Days Past Due Past over Customer Balance Due Ashby & Co. $ $ 150 B. T. Barr $ 350 $260 Brock Co. 470 $ 470 Saxon Woods Co Total $86,300 $75,000 $4,000 $3,100 $1,900 $1,200 $800 $300 Uncollectibles PERCENT 2% 5% 10% 20% 30% 50% 80% Uncollectible percentages based on experience and industry averages.

Not Days Past Due Past over Customer Balance Due Ashby & Co. $ $ 150 B. T. Barr $ 350 $260 Brock Co. 470 $ 470 Saxon Woods Co Total $86,300 $75,000 $4,000 $3,100 $1,900 $1,200 $800 $300 Uncollectibles PERCENT 2% 5% 10% 20% 30% 50% 80% AMOUNT $3,390 = $1,500 $200 $310 $380 $360 $400 $240

Year-End Adjustment for Uncollectibles
General Ledger Balance Sheet Accounts Receivable Accounts receivable $86,300 Less allowance for doubtful accounts 3,390 Net accounts receivable 82,910 A 86,300 Allowance for Doubtful Accts. 510 A A Balances before adjustment Uncollectible Accts. Expense

General Ledger Balance Sheet Accounts Receivable Accounts receivable $86,300 Less allowance for doubtful accounts 3,390 Net accounts receivable 82,910 A 86,300 Allowance for Doubtful Accts. 510 A 2,880 B A Balances before adjustment Year-end adjustment $3,390 - $510 = $2,880 B Uncollectible Accts. Expense B 2,880

General Ledger Balance Sheet Accounts Receivable Accounts receivable $86,300 Less allowance for doubtful accounts 3,390 Net accounts receivable 82,910 A 86,300 C Allowance for Doubtful Accts. 510 A 2,880 B A Balances before adjustment 3,390 C Year-end adjustment $3,390 - $510 = $2,880 B Uncollectible Accts. Expense B 2,880 C Balance after adjustment

TechCom determines that Jack Kent’s $520 account is uncollectible.
Writing Off a Bad Debt With the allowance method, when an account is determined to be uncollectible, the debit goes to Allowance for Doubtful Accounts. TechCom determines that Jack Kent’s $520 account is uncollectible.

Recovery of a Bad Debt Subsequent collections require that the original write-off entry be reversed before the cash collection is recorded.

Estimate Based on a Percentage of Sales 9-4 If credit sales for the period are $3,000,000 and it is estimated that 1½ % will be uncollectible, the Bad Debt Expense is debited for $45,000 ($3,000,000 x .015). This approach disregards the balance in the allowance account before the adjustment.

9-4 After this adjusting entry is posted, Allowance for Doubtful Accounts will have a balance of $48,250. Dec. 31 Bad Debt Expense Allowance for Doubtful Accounts Uncollectible accounts ($3,000,000 x = $45,000). 35

9-4 BAD DEBT EXPENSE Dec. 31 Adj entry 45,000 Dec. 31 Adjusted bal. 45,000 ALLOWANCE FOR DOUBTFUL ACCOUNTS { Jan. 1, 2008 Bal. 40,000 Total accounts written off $36,750 Jan. 21 6,000 Feb ,900 “ “ Dec. 31 Unadjusted bal 3,250 Dec. 31 Adj. entry 45,000 Dec. 31 Adjusted bal. 48,250 36

9-4 Example Exercise 9-3 At the end of the current year, Accounts Receivable has a balance of $800,000; Allowance for Doubtful Accounts has a credit balance of $7,500; and net sales for the year total $3,500,000. Bad debt expense is estimated at ½ of 1% of net sales. Determine (a) the amount of the adjusting entry for uncollectible accounts; (b) the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense; and (c) the net realizable value of accounts receivable. 37

Allowance for Doubtful Accounts ($7,500 + $17,500) 25,000
9-4 Follow My Example 9-3 $17,500 ($3,500,000 x .005) Adjusted Balance Accounts Receivable $800,000 Allowance for Doubtful Accounts ($7,500 + $17,500) 25,000 Bad Debt Expense 17,500 $775,000 ($800,000 – $25,000) 38 For Practice: PE 9-3A, PE 9-3B

Estimating Uncollectibles Based on Analysis of Receivables 9-4 The longer an account receivable is outstanding, the less likely that it will be collected. Basing the estimate of uncollectible accounts on how long specific amounts have been outstanding is called aging the receivables.

9-4 Aging of Accounts Receivables 40

Estimate of Uncollectible Accounts 9-4 41

Collection Rates by Number of Months Past Due 9-4 42

Estimate Based on Analysis of Receivables 9-4 If it is estimated that $3,390 of the receivables will be uncollectible and the Allowance for Uncollectible Accounts currently has a balance of $510, the Bad Debt Expense must be debited for $2,880 ($3,390 – $510). 43

9-4 Estimate Based on Analysis of Receivables
Estimate Based on Analysis of Receivables 9-4 Aug. 31 Bad Debt Expense Allowance for Doubtful Accounts Uncollectible accounts ($3,390 – $510). 44

9-4 BAD DEBT EXPENSE Aug. 31 Adj. entry 2,880 Aug. 31 Adj. bal. 2,880 ALLOWANCE FOR DOUBTFUL ACCOUNTS Aug. 31 Unadj. bal. 510 Aug. 31 Adj. entry 2,880 Aug. 31 Adj. bal. 3,390 45

9-4 If the unadjusted balance of Allowance for Uncollectible Accounts had been a debit balance of $300, the amount of the adjustment would have been $3,690 ($3,390 + $300).

9-4 BAD DEBT EXPENSE Aug. 31 Adj. entry 3,690 Aug. 31 Adj. bal. 3,690 ALLOWANCE FOR DOUBTFUL ACCOUNTS Aug. 31 Unadj. bal. 300 Aug. 31 Adj. entry 3,690 Aug. 31 Adj. bal. 3,390 47

9-4 Example Exercise 9-4 At the end of the current year, Accounts Receivable has a balance of $800,000; Allowance for Doubtful Accounts has a credit balance of $7,500; and net sales for the year total $3,500,000. Using the aging method, the balance of Allowance for Doubtful Accounts is estimated as $30,000. Determine (a) the amount of the adjusting entry for uncollectible accounts; (b) the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense, and (c) the net realizable value of accounts receivable. 48

Allowance for Doubtful Accounts 30,000 Bad Debt Expense 22,500
9-4 Follow My Example 9-4 $22,500 ($30,000 – $7,500) Adjusted Balance Accounts Receivable $800,000 Allowance for Doubtful Accounts 30,000 Bad Debt Expense 22,500 $770,000 ($800,000 – $30,000) 49 For Practice: PE 9-4A, PE 9-4B

9-5 Objective 5 Compare the direct write-off and allowance methods of accounting for uncollectible accounts

Direct Write-Off Method
9-5 Comparing Direct-Write-Off and Allowance Methods Direct Write-Off Method Allowance Method 51

Direct Write-Off Method
Comparing the Direct Write-Off and Allowance Methods 9-5 Direct Write-Off Method Amount of bad debt expense recorded Allowance account Primary users When the actual accounts receivable are determined to be uncollectible No allowance account is used Small companies and companies with relatively few receivables 52

Amount of bad debt expense recorded
53 Comparing the Direct Write-Off and Allowance Methods 9-5 Allowance Method Amount of bad debt expense recorded Allowance account Primary users Using estimate based on either (1) a percentage of sales or (2) analysis of receivables. The allowance account is used Large companies and those with a large amount of receivables

9-6 Objective 6 Describe the nature, characteristics, and accounting for notes receivable.

Notes Receivable A note is a written promise to pay a specific amount at a specific future date.

a specific amount of money (face amount)
9-6 Characteristics of Notes Receivable A note receivable, or promissory note, is a written document containing a promise to pay: a specific amount of money (face amount) on demand or at a definite time to an individual or a business (payee), or to the bearer or holder of the note.

Characteristics of Notes Receivable
A promissory note is a written document containing a promise to pay: a specific amount of money (principal) to a specific person or company (payee) at a specific place on a specific date or upon demand plus interest at a specific percentage of the principal (face) amount per year

9-6 Characteristics of Notes Receivable The one making the promise is called the maker. The date a note is to be paid is called the due date or maturity date.

Notes Receivable Julia Browne the order of
Exh. 10.14 Notes Receivable Term $1,000.00 July 10, 2002 Payee Ninety days after date I promise to pay to the order of TechCom Company, Los Angeles, CA One thousand and no/ Dollars Payable at First National Bank of Los Angeles, CA Maker Value received with interest at per annum 12% Julia Browne No Due 42 Oct. 8, 2002 For TechCom.

Notes Receivable Julia Browne the order of
Exh. 10.14 Notes Receivable $1,000.00 July 10, 2002 Principal Ninety days after date I promise to pay to the order of TechCom Company, Los Angeles, CA One thousand and no/ Dollars Payable at First National Bank of Los Angeles, CA Interest Rate Value received with interest at per annum 12% Julia Browne No Due 42 Oct. 8, 2002 Due Date For TechCom.

Payee Maker H. B. Lane 9-6 $_____________
9-6 Payee $_____________ Fresno, California______________20___ March ________________ _AFTER DATE _______ PROMISE TO PAY TO Ninety days We THE ORDER OF ____________________________________________ Judson Company _________________________________________________DOLLARS Two thousand five hundred 00/ PAYABLE AT ______________________________________________ City National Bank VALUE RECEIVED WITH INTEREST AT ____ 10% 2,500.00 NO. _______ DUE___________________ June 14, 2008 TREASURER, WILLIARD COMPANY H. B. Lane Maker 57

What is the due date of a 90-day note dated March 16?
9-6 What is the due date of a 90-day note dated March 16? Total days in note days Number of days in March 31 Issue date of note March 16 Remaining days in March –15 days 75 days Number of days in April –30 days 45 days Number of days in May –31 days Residual days in June 14 days Answer: June 14 58

Exh. 10.16 Interest Computation Even for maturities less than 1 year, the rate is annualized. If the note is expressed in days, base a year on 360 days.

Interest Computation Example
On March 1, 2002, Smithson, Inc. purchased a copier for $9,000 from Machines, Inc. Smithson gave Machines, Inc. a 12% note due in 90 days in payment for the copier. How much interest will be paid to Machines, Inc. in 90 days?

Interest Computation Example
Total interest due at May 30.

Calculating Interest and Maturity Value
We received a $2,500, 10%, 90-day note dated March 16, 2003. Interest Calculation Principal x Rate x Time = Interest $2,500 x 10% x 90 /360 = $62.50 Principal + Interest = Maturity Value $2,500 + $62.50 = $2,562.50 Maturity Value Calculation

Accounting for Notes Receivable 9-6 Received a $6,000, 12%, 30-day note dated November 21, 2008 in settlement of the account of W. A Bunn Co. Nov. 21 Notes Rec.—W. A. Bunn Co Accts. Rec.—W. A Bunn Co Received 30-day, 12% note dated November 21, 59

9-6 On December 21, when the note matures, the firm receives $6060 from W. A. Bunn Company ($6,000 plus $60 interest). Dec. 21 Cash Notes Rec.—W. A. Bunn Co Interest Revenue* 60 00 Received principal and interest on matured note. 60 *$6,000 x 12% x 30/360 = $60

9-6 If W. A. Bunn Company fails to pay the note on the due date, it is considered a dishonored note receivable. The note and interest are transferred to the customer’s account. Dec. 21 Accts Rec.—W. A. Bunn Co Notes Rec.—W. A. Bunn Co Interest Revenue 60 00 Recorded dishonored note, plus interest. 61

9-6 A 90-day, 12% note dated December 1, 2008, is received from Crawford Company to settle its account, which has a balance of $4,000. 2008 Dec. 1 Notes Rec.—Crawford Co Accts. Rec.—Crawford Co Accepted note in settlement of account. 62

9-6 Assuming that the accounting period ends on December 31, an adjusting entry is required to record the accrued interest of $40 ($4,000 x 0.12 x 30/360). 2008 Dec. 31 Interest Receivable Interest Revenue 40 00 Accrued interest ($4,000 x 12% x 30/360). 63

9-6 On March 1, 2009, $4,120 is received for the note ($4,000) and interest ($120). 2009 Mar. 1 Cash Notes Rec.—Crawford Co Interest Receivable 40 00 Interest Revenue 80 00 ($4,000 x 12% x 30/360). Collected note and accrued interest. 64

Determine the due date of the note.
9-6 Example Exercise 9-5 Same Day Surgery Center received a 120-day, 6% note for $40,000, dated March 14 from a patient on account. Determine the due date of the note. Determine the maturity value of the note. Journalize the entry to record the receipt of the payment of the note at maturity. 65

July 12 determined as follows:
9-6 Follow My Example 9-5 July 12 determined as follows: March 17 days (31 – 14) April 30 days May 31 days June 30 days July 12 days Total days $40,800 [$40,000 + ($40,000 x 6% x 120/360)] Cash 40,800 Notes Receivable 40,000 Interest Revenue 800 66 For Practice: PE 9-5A, PE 9-5B

Describe the reporting of receivables on the balance sheet.
9-7 Objective 7 Describe the reporting of receivables on the balance sheet.

Crabtree Co. Balance Sheet December 31, 2008
Receivables on Balance Sheet 9-7 Crabtree Co. Balance Sheet December 31, 2008 Assets Current assets: Cash $119,500 Notes receivable 250,000 Accounts receivable $445,000 Less allowance for doubtful accounts 15, ,000 Interest receivable 14,500 Merchandise inventory 714,000 68 Receivables (including the allowance account) are highlighted

Accounts Receivable Turnover 9-7 The accounts receivable turnover measures how frequently during the year the accounts receivable are being converted to cash. Accounts Receivable Turnover Net sales Average accounts receivable = 69

Federal Express Corporation 9-7 * [($2,475 + $2,199)/2] Net sales $19,364 $17, Accounts receivable 2,703 2,475 $2,199 Average accounts receivable 2,589 2,337 Accounts Receivable Turnover (2004) $17,383 $2,337 = Accounts Receivable Turnover (2004) = 7.4 70

Federal Express Corporation 9-7 Net sales $19,364 $17, Accounts receivable 2,703 2,475 $2,199 Average accounts receivable 2,589 2,337 * [($2,703 + $2,475)/2] Accounts Receivable Turnover (2005) $19,364 $2,589 = Accounts Receivable Turnover (2005) = 7.5 71

Number of Days’ Sales in Receivables 9-7 Use: To assess the efficiency in collecting receivables and in the management of credit. Average Accounts receivable Average daily sales Number of Days’ Sales in Receivables = 72

Federal Express Corporation 9-7 Net sales $19,364 $17,383 Accounts receivable 2,703 2,475 $2,199 Average accounts receivable 2,589 2,337 Average daily sales * [($2,475 + $2,119)/2] ** ($17,383/365) --- Number of Days’ Sales in Receivables (2004) $2,337 47.6 = Number of Days’ Sales in Receivables (2004) = 49.1 73

Federal Express Corporation 9-7 * [($2,703+ $2,475)/2] ($19,364/365) ** Net sales $19,364 $17,383 Accounts receivable 2,703 2,475 $2,199 Average accounts receivable 2,589 2,337 Average daily sales --- Number of Days’ Sales in Receivables (2005) $2,589 53.1 = Number of Days’ Sales in Receivables (2005) = 48.8 74

9 Receivables.

Similar presentations

Presentation on theme: "9 Receivables."— Presentation transcript:

Similar presentations

About project

Feedback

Log in

Auth with social network:

9 Receivables.

Similar presentations

Presentation on theme: "9 Receivables."— Presentation transcript:

Similar presentations

About project

Feedback