Sales On Return Help ?

3. False Value Hardware began 2011 with a credit balance of $32,000 in the allowance for sales returns account. Sales and cash collections from customers during the year were $650,000 and $610,000, respectively. False Value estimates that 6% of all sales will be returned. During 2011, customers returned merchandise for credit of $28,000 to their accounts. What is the balance in the allowance for sales returns account at the end of 2011?
A. $11,000.
B. $39,000.
C. $43,000.
D. $21,000.
4. False Value’s 2011 income statement would report net sales of:
A. $622,000.
B. $607,000.
C. $646,000.
D. $611,000.
Thompson TV and Appliance reported the following in its 2011 financial statements:
5. Thompson’s 2011 gross profit ratio is:
A. 25%.
B. 19%.
C. 20%.
D. None of the above is correct.
6. Thompson’s 2011 inventory turnover ratio is:
A. 3.91.
B. 4.00.
C. 4.88.
D. 5.00.
7. Robertson Corporation’s inventory balance was $22,000 at the beginning of the year and $20,000 at the end. The inventory turnover ratio for the year was 6.0 and the gross profit ratio 40%. What were net sales for the year?
A. $126,000
B. $200,000
C. $120,000
D. $210,000
Anthony Thomas Candies (ATC) reported the following financial data for 2011 and 2010:
8. ATC’s gross profit ratio (rounded) in 2011 is:
A. 53.4%.
B. 51.9%.
C. 50.3%.
D. None of the above is correct.
9. ATC’s inventory turnover ratio for 2011 is:
A. 2.42.
B. 2.76.
C. 3.21.
D. None of the above is correct.
10. The average days inventory for ATC (rounded) for 2011 is:
A. Less than 100 days.
B. 114 days.
C. 132 days.
D. 151 days.

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