eTextbook Gradebook ignment the amounts presented here are b

eTextbook Gradebook ignment the amounts presented here are basic fnandial information (in milons) from the 2019 arnual reports of Nike and Adidas 17,942.4 $10,626.0 Allowance for doubtful accounts, beginning Allowance for doubitful accounts, ending 110 receivable balance (oross), beginning 2,924 1,730 Accounts receivable balance (gross), ending 2,962 1,5 Calculate the accounts recelivable turnover for both companies. (Round answers to 1 decional place, e.g. 12.5) receivable turnover Calculate the average collection period for both companies (Round atrsiwers to 1 decimal plce,ea. 12.5. Use 365 days for calculation) Average collection perlod Cick it you would Sike to Show Work for this question: Sr days Cortana. Ask me

Solution

Accounts Receivable turnover is calculated as follows

Net Credit Sales ÷ ((Beginning Accounts Receivable + Ending Accounts Receivable) / 2)

Calculation of beginning and ending accounts receivables

Nike

Addidas

Opening balance gross

$    2,924.00

$    1,730.00

Opening balance of Doubtful debts

$          80.00

$        120.00

Net Opening Balance

$    2,844.00

$    1,610.00

Closing balance gross

$    2,962.00

$    1,548.00

Closing balance of Doubtful debts

$        110.00

$        122.00

Net Closing Balance

$    2,852.00

$    1,426.00

Accounts receivable turnover

Average Receivables

$    2,848.00

$    1,518.00

Net sales

$ 17,942.40

$ 10,626.00

Accounts receivable turnover

6.3 times

7 times

Average Collection period

Average accounts receivable ÷ (Annual sales ÷ 365 days)

Nike

Addidas

Average Receivables

$    2,848.00

$    1,518.00

Annual credit sales

$ 17,942.40

$ 10,626.00

No of days in a year

365

365

Average Collection period

57.94

52.14

Average Collection period

58 days Approx

52 days Approx

Accounts Receivable turnover is calculated as follows

Net Credit Sales ÷ ((Beginning Accounts Receivable + Ending Accounts Receivable) / 2)

Calculation of beginning and ending accounts receivables