2.Assuming all sales were on credit, what amount of cash did Mattel collectfrom customers in 2008? 3.Compute Mattel’s Net Profit Margin for the last three years. Show percentage to two decimal places. 4.The industry average for net profit margin is 10.26%. What does this and the above results suggest about Mattel? B.The following transactions were selected from the records of Califano Company: 12 of 17
Oct. 12 Sold goods to Ms. Albinder, who charged the $3,000 purchase on her VISA credit card. VISA charges Califano a 2% credit card fee.Oct. 15 Sold merchandise to Ms. Luzzi for $5,000 on account, terms 3/10, n/30.Oct. 22 Ms. Luzzi returned $1,000 of items purchase on Oct. 15 (they were the wrong size), and credit was given to the customer.Oct. 23 Collected cash from Ms. Luzzi from the Oct. 15 purchase.Oct. 30 Collected cash from Ms. Albinder for the Oct. 12 purchase.Assuming returns and any discounts are treated as contra-revenues, compute net salesbased on these transactions by filling in the following schedule:Sales revenue8000Sales returns and allowances1000Sales discounts1000Credit card discounts60Net sales6940 13 of 17
C.At the end of 2008, the unadjusted trial balance of Bird Industries, Inc., indicated $176,000 in Accounts Receivable, a credit balance of $12,100 in Allowance for Doubtful Accounts, and Sales Revenue (all on credit) of $14,360,000.Based on prior experience, Bird estimates a 0.1 percent bad debt rate on credit sales.You must show well-labeled computations (below problem) to receive partial credit. a.What is the amount of bad debt expense that should be recorded for 2008?b.Show where and how Accounts Receivable will be reported on the 2008 balance sheet.Which section of the classified balance sheet will it appear?How will the receivables line be written?D. Lane Enterprises uses the aging approach to estimate bad debt expense. At the end of 2008, Lane estimates that $3,900 of the $270,000 in accounts receivable will likely be uncollectible. The allowance for doubtful accounts has a $200 debit balance at year-end. You must show well-labeled computations (below problem) to receive partial credit. a.What is the amount of bad debt expense that should be recorded for 2008?b.Show where and how Accounts Receivable will be reported on the 2008 balance sheet.How will receivables line be written? 14 of 17
Part 4: Multiple Choice (6 points) Place your answer in the space provided next to each question.
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