do only exercise 17-9

Sanderson Company's year-end balance sheets follow. Express the balance sheets in common-size per- Exercise 17-7 cents. Round amounts to the nearest one-tenth of a percent. Analyze and comment on the results. Common-size percents At December 31 2012 201 1 2010 P2 Assets Cash . . . . . . . . ... $ 30,800 $ 35,625 $ 36,800 Accounts receivable, net . 88,500 $2,500 49,200 Merchandise inventory 1 1 1,500 82,500 53,000 Prepaid expenses 9.700 9,375 4,000 Plant assets, net . . 277.500 255,000 229,500 Total assets . . . . . $518,000 $445,000 $372,500 Liabilities and Equity Accounts payable $128,900 $ 75,250 $ 49,250 Long-term notes payable secured by mortgages on plant assets 97.500 102,500 82,500 Common stock, $10 par value . . . . . . .. . 162,500 162,500 162,500 Retained earnings 129,100 104,750 78,250 Total liabilities and equity . . . $518,000 $445,000 $372,500 718 Chapter 17 Analysis of Financial Statements Exercise 17-9 Refer to the Sanderson Company information in Exercise 17-7. The company's income statements for the Liquidity analysis and years ended December 31, 2012 and 2011, follow. Assume that all sales are on credit and then compute: interpretation (1) days' sales uncollected, (2) accounts receivable turnover, (3) inventory turnover, and (4) days' sales in P3 1 inventory. Comment on the changes in the ratios from 2011 to 2012. (Round amounts to one decimal.) For Year Ended December 31 2012 201 1 Sales .... . . . . . ... .............. $672,500 $530,000 Cost of goods sold . . . . . . . . . . .... $410,225 $344,500 Other operating expenses . .. . . . . . 208,550 133,980 Interest expense . . . . ....... 11,100 12,300 Income taxes . . . . 8,525 7,845 Total costs and expenses . . . . . 638,400 498,625 Net income. $ 34.100 $ 31.375 Earnings per share . . .. . . . . $ 2.10 1.93