Refer to the Financial statements and accompanying notes of American Eagle Outfitters given in Appendix B at the end of the book, or open file AEOS.pdf in the Annual Report Cases directory on the student CD-ROM.

Required: 1. What is the company's revenue recognition policy? 2. Assuming that $30 million of cost of sales was due to noninventory purchase expenses (occupancy and warehousing costs), how much inventory did the company buy during the year? (Hint:

Use a T-account of inventory to infer how much was purchased.) 3. Measuring general, administrative, and selling expenses as a percent of sales for 2000 and 1999, how much did it increase from 1999 to 2000? What explanation does management offer for this change? 4. Compute the company's total asset turnover for 2000, and explain its meaning.