The following information has been adapted from the annual financial statements of General Mills, Inc.

1. What are the total amounts of accounts receivable for the two years given before considering the possible uncollectible accounts? That is, what are gross accounts receivable?
2. Do you think the company has a significant amount of bad debts? Why or why not?
3. Shortly after the financial statements were released, the company was notified that a major customer, who owes the company over a million dollars, had filed for bankruptcy. If the company had received that information before the financial statements were released, and recorded it, how would it have changed the financial statements for the period? Explain.
4. Calculate the accounts receivable turnover ratio for 2008 and 2007. (Net accounts receivable at the end of fiscal 2006 was $912 million.) Also, calculate the number of days it takes, on average, to collect an account receivable. Explain this information to the company’smanagement.

  • CreatedSeptember 01, 2014
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