Nike and Under Armour both sell sports apparel.

Nike and Under Armour both sell sports apparel. Nike has a May 31
year end while Under Armour has a December 31 year end. For both
companies, shipments to sporting goods retailers occur mostly in
December. Both companies offer 60-day credit terms to retailers.
Based on reported information from each company’s annual report, all
else equal, would you expect Nike to have a (1) higher or lower
Accounts Receivable Turnover and (2) higher or lower Days to Collect
than Under Armour? Explain briefly.

In fiscal year 2014, $1,350 of sales related to license products. The
inventory cost Scholastic $580 to manufacture. Additionally, Scholastic
pays 7% royalties on these sales. Scholastic incurs royalty expense for
the use of certain intellectual property (e.g., when it sells a Star Wars
book). This expense is included as part of cost of goods sold. Assume
Scholastic has not paid any cash royalties related 2012 yet.
Prepare the journal entries that Scholastic made in 2014 (1) related to the
sale of the licensed products and (2) record royalty expense.
Scholastic permits customers to return any item for any reason within 60
days of sale. Scholastic estimates that 20% of its sales in May 2014 will
be returned in July 2014. According to GAAP, does Scholastics record
the effect of these returned products on its income statement in 2014 or
2015? Briefly explain why.