Belk has a chain of department stores across the South. Top management requires that each store manager collect, maintain, and respond to customer complaints (emails, letters, calls, etc.). Each store manager is supposed to keep a list of complaints that have been received. Top management is considering establishing a more formalized method of monitoring and evaluating the response managers give to the complaints. They want some information that will tell them whether they need to develop such a formalized program or whether they can leave well enough alone and allow managers to use their discretion in handling the complaints. They want to review a sample of these complaints and the responses to them. What sampling plan should be used? Why? (4 points)

Sheridan Company

Journal Entries:

a.  March 2: Debit Inventory $862,000

Credit Accounts Payable (Skysong Company) $862,000

To record the purchase of merchandise on credit terms 2/10, n/30.

b. March 6: Debit Accounts Payable (Skysong Company) $110,700

Credit Inventory $110,700

To record the return of merchandise on account.

c. March 12: Debit Accounts Payable (Skysong Company) $751,300

Credit Cash $736,274

Credit Cash Discounts $15,026

To record the payment on account in full settlement, including cash discounts.

Explanation:

1) Data and Analysis:

a.  March 2: Inventory $862,000 Accounts Payable (Skysong Company) $862,000 terms 2/10, n/30.

b. March 6: Accounts Payable (Skysong Company) $110,700 Inventory $110,700

c. March 12: Accounts Payable (Skysong Company) $751,300 Cash $736,274 Cash Discounts $15,026