Accounting please Bella Fashion offers customers a 30-day return policy. Based on pastexperience, the company expects 3.5% of sales to be returned within thereturn period. If Bella Fashion recorded total sales of $7.5 million for thequarter, what amount of net sales should it record?

Step 1: Detailed Explanation of Net SalesNet Sales represent the actual revenue a business expects…

Answered: Bella Fashion offers customers a 30-day…

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter22: Providing And Obtaining Credit

Section: Chapter Questions

Problem 4MC

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Equate Inc. sells products with a cost of $25,000 during the year to customer for $55,000. It is Equate’s policy to accept returns up to 60 days after the date of purchase. Equate estimates that there is a 60% probability that returns will be 3% of sales and a 40% probability that returns will be 2.5% of sales. What is the transaction price under a) expected value method b) most likely amount method? Choices: A: $53,460 B: $53,350 A: $53,350 B: $53,460 A: $53,460 B: $54,450 A: $54,450 B: $53,460 A: $53,350 B: $53,350
a. Assume that the cost of goods sold is 60% and that the monthly discount rate is 1%. Looking at the values in the exhibit above, you note that the average monthly revenue for a subscribed customer rises as the company sends more emails. In addition, the average monthly revenue for an unsubscribed customer also rises as the company sends more emails. What could explain both of these patterns? b. Calculate the 6-month LTV for each of the four tested email frequencies. Please show the spreadsheet with your calculations and be clear about any assumptions you are making. c. Based on this test, how many emails-per-week should the company be sending to its customers? This email frequency should apply to all customers; the company doesn't want to implement a different email frequency for different kinds of people
Han Corp's sales last year were $300,000, and its year-end receivables were $49,000. The firm sells on terms that call for customers to pay 30 days after the purchase, but some delay payment beyond Day 30. On average, how many days late do customers pay? Base your answer on this equation: DSO - Allowed credit period = Average days late, and use a 365-day year when calculating the DSO. Assume all sales to be on credit. Do not round your intermediate calculations.
ModCloth Inc. offers an unconditional return policy. It normally expects 2% of sales at retail selling prices to be returned before the return period expires. Assuming ModCloth records total sales of $18 million for the current period, what amount of net sales should it record for this period? $Answer
Harper Corp.'s sales last year were $395,000, and its year-end receivables were $42,500. Harper sells on terms that call for customers to pay 30 days after the purchase, but many delay payment beyond Day 30. On average, how many days late do customers pay? Base your answer on this equation: DSO - Allowed credit period = Average days late, and use a 365-day year when calculating the DSO. O a. 9.74 b. 8.37 Oc8.81 Od. 7.95 Oe. 9.27
MoonWear, Inc. offers an unconditional return policy. It normally expects 2.5% of sales at retail selling prices to be returned before the return period expires. Assuming that MoonWear records total sales of $12.5 million for the current period, what amount of net sales should it record for this period?
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You prefer to extend credit on the assumption that you will be paid in full within 10 days of the sales. Firm X has average inventory of $720,000 with all cash sales (no credit sales) of $4,400,000. If you extend credit to this firm, can you expect to be paid on time? Assume 365 days in a year. Round your answer to the nearest whole number. The inventory turnover is days, therefore, you expect to be paid in 10 days.
Dulaney's Stores has posted the following yearly earnings and expenses. A) Dulaney's current profit margin is %?? Dulaney's current yearly ROA is %?? B)Suppose COGS and merchandise inventory were each cut by 10% The new pretax profit margin is %?? The new ROA is %?? Based on the current profit margin in part a., Dulaney would have to generate$ ?? in additional sales in order to have the same effect on pretax earnings as a 10% decrease in merchandise costs.
Cainhurst Inc. had sales last year totaling $530,000, and its year-end Accounts Receivable were $62,750. The firm sells on terms that call for customers to pay within 30 days after the purchase, but some customers delay payment beyond this deadline (meaning they pay late). On average, how many days LATE do customers pay? Base your answer on a 365-day year when calculating the DSO.
What is their collection period??
Negus Enterprises has an inventory conversion period of 50 days, an average collection period of 35 days, and a payables deferral period of 25 days. Assume that cost of goods sold is 80% of sales. What is the length of the firm’s cash conversion cycle? If annual sales are $4,380,000 and all sales are on credit, what is the firm’s investment in accounts receivable? How many times per year does Negus Enterprises turn over its inventory?

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Bella Fashion offers customers a 30-day return policy. Based on past experience, the company expects 3.5% of sales to be returned within the return period. If Bella Fashion recorded total sales of $7.5 million for the quarter, what amount of net sales should it record?