FedEx Corporation, a multinational delivery services company, is preparing its annual financial statements for the fiscal year ending May 31, 2024. The company's accounting department has compiled the following information: accounts receivable balance on June 1, 2023, was $8.2 billion; credit sales for the year totaled $92.5 billion; cash collections from customers amounted to $90.8 billion; and write-offs of uncollectible accounts were $0.4 billion. FedEx estimates that 2% of its ending accounts receivable balance will be uncollectible. The company wants to determine the balance of its accounts receivable, the allowance for doubtful accounts, and the net realizable value of accounts receivable as of May 31, 2024. PepsiCo, Inc., a multinational food and beverage corporation, is evaluating its fixed assets at the end of its fiscal year 2023. The company purchased a new bottling machine on January 1, 2020, for $5,000,000 with an estimated useful life of 10 years and a salvage value of $500,000. PepsiCo uses the straight-line depreciation method for its machinery. On December 31, 2023, PepsiCo received an offer to sell the machine for $3,200,000. The company is considering whether to keep the machine or sell it, and needs to determine if selling would result in a gain or loss. Calculate the book value of the machine as of December 31, 2023, and determine whether selling the machine would result in a gain or loss, and by how much.
FedEx Corporation, a multinational delivery services company, is preparing its annual financial statements for the fiscal year ending May 31, 2024. The company's accounting department has compiled the following information: accounts receivable balance on June 1, 2023, was $8.2 billion; credit sales for the year totaled $92.5 billion; cash collections from customers amounted to $90.8 billion; and write-offs of uncollectible accounts were $0.4 billion. FedEx estimates that 2% of its ending accounts receivable balance will be uncollectible. The company wants to determine the balance of its accounts receivable, the allowance for doubtful accounts, and the net realizable value of accounts receivable as of May 31, 2024. PepsiCo, Inc., a multinational food and beverage corporation, is evaluating its fixed assets at the end of its fiscal year 2023. The company purchased a new bottling machine on January 1, 2020, for $5,000,000 with an estimated useful life of 10 years and a salvage value of $500,000. PepsiCo uses the straight-line depreciation method for its machinery. On December 31, 2023, PepsiCo received an offer to sell the machine for $3,200,000. The company is considering whether to keep the machine or sell it, and needs to determine if selling would result in a gain or loss. Calculate the book value of the machine as of December 31, 2023, and determine whether selling the machine would result in a gain or loss, and by how much.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:FedEx Corporation, a multinational delivery services company, is preparing its
annual financial statements for the fiscal year ending May 31, 2024. The
company's accounting department has compiled the following information:
accounts receivable balance on June 1, 2023, was $8.2 billion; credit sales for
the year totaled $92.5 billion; cash collections from customers amounted to
$90.8 billion; and write-offs of uncollectible accounts were $0.4 billion. FedEx
estimates that 2% of its ending accounts receivable balance will be
uncollectible. The company wants to determine the balance of its accounts
receivable, the allowance for doubtful accounts, and the net realizable value
of accounts receivable as of May 31, 2024. PepsiCo, Inc., a multinational food
and beverage corporation, is evaluating its fixed assets at the end of its fiscal
year 2023. The company purchased a new bottling machine on January 1,
2020, for $5,000,000 with an estimated useful life of 10 years and a salvage
value of $500,000. PepsiCo uses the straight-line depreciation method for its
machinery. On December 31, 2023, PepsiCo received an offer to sell the
machine for $3,200,000. The company is considering whether to keep the
machine or sell it, and needs to determine if selling would result in a gain or
loss. Calculate the book value of the machine as of December 31, 2023, and
determine whether selling the machine would result in a gain or loss, and by
how much.
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