Question
Required information Skip to question [The following information applies to the questions displayed below.] Simon Companys year-end balance sheets follow. At December 31 Current Yr
Required information
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[The following information applies to the questions displayed below.] Simon Companys year-end balance sheets follow.
At December 31 | Current Yr | 1 Yr Ago | 2 Yrs Ago | ||||||||
Assets | |||||||||||
Cash | $ | 31,800 | $ | 35,625 | $ | 37,800 | |||||
Accounts receivable, net | 89,500 | 62,500 | 50,200 | ||||||||
Merchandise inventory | 112,500 | 82,500 | 54,000 | ||||||||
Prepaid expenses | 10,700 | 9,375 | 5,000 | ||||||||
Plant assets, net | 278,500 | 255,000 | 230,500 | ||||||||
Total assets | $ | 523,000 | $ | 445,000 | $ | 377,500 | |||||
Liabilities and Equity | |||||||||||
Accounts payable | $ | 129,900 | $ | 75,250 | $ | 51,250 | |||||
Long-term notes payable | 98,500 | 101,500 | 83,500 | ||||||||
Common stock, $10 par value | 163,500 | 163,500 | 163,500 | ||||||||
Retained earnings | 131,100 | 104,750 | 79,250 | ||||||||
Total liabilities and equity | $ | 523,000 | $ | 445,000 | $ | 377,500 | |||||
The companys income statements for the current year and one year ago follow. Assume that all sales are on credit:
For Year Ended December 31 | Current Yr | 1 Yr Ago | ||||||||||
Sales | $ | 673,500 | $ | 532,000 | ||||||||
Cost of goods sold | $ | 411,225 | $ | 345,500 | ||||||||
Other operating expenses | 209,550 | 134,980 | ||||||||||
Interest expense | 12,100 | 13,300 | ||||||||||
Income tax expense | 9,525 | 8,845 | ||||||||||
Total costs and expenses | 642,400 | 502,625 | ||||||||||
Net income | $ | 31,100 | $ | 29,375 | ||||||||
Earnings per share | $ | 1.90 | $ | 1.80 | ||||||||
(1-a) Compute days' sales uncollected. (1-b) For each ratio, determine if it improved or worsened in the current year.
(2-a) Compute accounts receivable turnover. (2-b) For each ratio, determine if it improved or worsened in the current year.
(3-a) Compute inventory turnover. (3-b) For each ratio, determine if it improved or worsened in the current year.
(4-a) Compute days' sales in inventory. (4-b) For each ratio, determine if it improved or worsened in the current year.
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