Essay about Sales and Johnson Toy Company

1486 Words Mar 22nd, 2013 6 Pages
Logistics 1 – Introduction to Logistics
Case 5-1 “Johnson Toy Company

(1) From the standpoint of an individual concerned with accounting controls, discuss and evaluate Johnson Toy Company’s present policies for handling returned items.
From the accounting control perspective, the financial records are evidently inaccurate leading to poor overall control, e.g. Greg Sullivan confidently indicated that his records shows 2.6 million Jungle Jim dolls are in stock for recycling; however, Carolyn Coggins expressed the concern that dealers will return the 2 million dolls currently held in their stock. This discrepancy is due to vague and poor return policies provided to management, e.g. field sales reps would customize return policies that
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3. All products must be returned within 48 hours (2 business days) after the authorization number has been issued. The customer must use the carrier selected by Johnson Toy Company. Charges of return are subjected to the conditions indicated by the sales representative of the customer`s account.
4. Special Circumstances: When products are considered unsellable for reasons other than functional damages or is a slow-selling product in the off season, e.g. a product receiving bad press (such as the case of Jungle Jim and Jogger Dolls), Johnson Toy Company will allow returns of all such non-sellable items under the following conditions: A. Retailers must pay for the returned merchandise to reach Johnson Toy Company’s plant. B. The customer must use the carrier selected by Johnson Toy Company. C. The full amount of said purchase will be credited to the retailer’s account. D. Credit must be used within 30 days upon receipt of returned goods at Johnson’s plant; credit WILL be void after 30 days.

(6) On the basis of the policy in

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