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

Required: 1. How much cash and cash equivalents does the company report at the end of the current year? 2. Does the company report an allowance for doubtful accounts on the balance sheet or in the notes? Explain why it does or does not. (Hint: Consider the makeup of its receivables.) 3. Compute the company's gross profit percentage for the most recent two years. Has it risen or fallen? Explain the meaning of the change. 4. Where does the company disclose its revenue recognition policy? When does the company record revenues for the "sale" of stored value cards and gift certificates?