Chapter 9, Problem 7QAP

Buckner’s Clothing is a retail store specializing in women’s clothing. The store has established a liberal return policy for the holiday season in order to encourage gift purchases. Any item purchased during November and December may be returned through January 31, with a receipt, for cash or exchange. If the customer does not have a receipt, cash will still be refunded for any item under $75. If the item is more than $75, a check is mailed to the customer. Whenever an item is returned, a store clerk completes a return slip, which the customer signs. The return slip is placed in a special box. The store manager visits the return counter approximately once every two hours to authorize the return slips. Clerks are instructed to place the returned merchandise on the proper rack on the selling floor as soon as possible. This year, returns at Ramona’s have reached an all-time high. There are a large number of returns under $75 without receipts.   How can sales clerks employed at Buckner’s…

Listed below are selected events transactions relating to Windsor, Inc. for the current year ending December 31.Windsor manufactures laptop computers for sale in its own stores and for sale by other retailers. 1.   On December 1, Windsor accepted an order from a new customer, Bonita Computers. Bonita has a questionable credit history, so Windsor requires a $12,000 deposit from Bonita in order to begin production on its order. 2.   During December, cash sales at Windsor’s retail locations totaled $4,922,000, which includes the 7% sales tax Windsormust remit to the state by the fifteenth day of the following month. 3.   During the year, Windsor was sued by a competitor for a patent violation. The competitor is claiming that Windsor’s liability is $2,950,000. Windsor’s attorneys have advised it that it is probable that the court will find for the company’s competitor. The attorneys estimate that the liability under the suit could be as little as $118,000 or as much as $590,000.…

Layaway plans allow you, for a fee, to pay for an item over a period of time and then receive the item when you finish paying for it. In November 2011, Senator Charles E. Schumer of New York warned that the holiday layaway programs recently reinstated by several popular retailers were, when you took the fees into account, charging interest at a rate significantly higher than the highest credit card rates.† Suppose that you bought a $66 item on November 15 on layaway, with the final payment due December 15, and that the retailer charged you a $5 service fee