ASSIGNMENT RESOURCES Expand Your Critical Thinking 8-3 The financial statements
ID: 2551044 • Letter: A
Question
ASSIGNMENT RESOURCES Expand Your Critical Thinking 8-3 The financial statements of Amazon.com, Inc. are presented in Appendix D. Problem 8-5A Problem 8-6A Expand Your Critic ndix Financial statements of Wal-Mart Stores, Inc. are presented in Appendix E Review Score Review Results by StudyClick here to view Appendix E. Objective Based on the information contained in these financial statements, compute the following values for each company for the most recent fiscal year. (Round answers to 1 decimal place, e.g. 15.2.) (1) Accounts receivable turnover. (For Amazon.com, use "Net product sales." Assume all sales were credit sales.) (2) Average collection period for accounts receivable Amazon.com Wal-Mart stores Accounts receivable turnover times times Average collection period days days SHOW ANSWER LINK TO TEXT Question Attempts: 0 of 2 used SAVE FOR LATER SUBMIT ANSWERExplanation / Answer
Account receivable turnover = Net Credit Sales / Average Account Receivables
Amazon.com
Average Account Receivable = ($5,612 + $4,767) / 2 = $5,189.5
Account Receivable Turnover = $70,080 / $5189. 5 = 13.50 times
Wal-Mart Stores
Average Account Receivable = ($6,778 + $6,677) / 2 = $6,727.5
Account Receivable Turnover = $482,229 / $6,727. 5 = 71.7 times
Average Collection Period = Number of Days in the period / Account Receivable turnover
Amazon.com = 365 / 13.50 = 27.01 or 27 days
Wal-Mart Stores = 365 / 71.7 = 5.1 days
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Amazon.com Wal-Mart Stores Account Receivable turnover 13.5 times 71.7 times Average collection period 27 days 5.1 days