Chapter 8, Problem 8.1ACOMP

Case A. Dr Pepper Snapple Croup, Inc., is a leading integrated brand owner, bottler, and distributor of nonalcoholic beverages in the United States. Canada, and Mexico. Key brands include Dr Pepper. Snapple. 7-UP. Mott’s juices, A&W root beer. Canada Dry ginger ale. Schweppes ginger ale, and Hawaiian Punch, among others.

The following represents selected data from recent financial statements of Dr Pepper Snapple Group (dollars in millions):

DR PEPPER SNAPPLE CROUP, INC. Consolidated Balance Sheets (partial)
(In millions)	December 31, 2014	December 31, 2013
Assets
Current assets:
Cash and cash equivalents	$237	$153
Accounts receivable (net of allowances of $2 and $3. respectively)	61	58

Consolidated Statements of Income (partial)
	For the Year Ended December 31
(in millions)	2014	2013	2012
Net sales	$6,121	$5,997	$5,995
Net income	$ 703	$ 624	$ 629

The company also reported bad debt expense of SI million in 2014, $1 million in 2013. and $2 million in 2012.

1. 1. Record the company's write-offs of uncollectible accounts for 2014.
2. 2. Assuming all sales were on credit, what amount of cash did Dr Pepper Snapple Group collect from customers in 2014?
3. 3. Compute the company’s net profit margin (rounded to four decimal places) for the three years presented. What does the trend suggest to you about Dr Pepper Snapple Group?