Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Required information [The following information applies to the questions displayed below.] Simon Companys year-end balance sheets follow. At December 31 Current Yr 1 Yr Ago

Required information

[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 $ 34,016 $ 39,762 $ 42,272
Accounts receivable, net 89,200 63,000 50,600
Merchandise inventory 113,000 83,500 58,000
Prepaid expenses 10,954 10,437 4,697
Plant assets, net 347,206 315,694 284,631
Total assets $ 594,376 $ 512,393 $ 440,200
Liabilities and Equity
Accounts payable $ 143,560 $ 83,997 $ 56,363
Long-term notes payable secured by mortgages on plant assets 108,390 114,315 94,366
Common stock, $10 par value 162,500 162,500 162,500
Retained earnings 179,926 151,581 126,971
Total liabilities and equity $ 594,376 $ 512,393 $ 440,200

The companys income statements for the Current Year and 1 Year Ago, follow. Assume that all sales are on credit:

For Year Ended December 31 Current Yr 1 Yr Ago
Sales $ 772,689 $ 609,748
Cost of goods sold $ 471,340 $ 396,336
Other operating expenses 239,534 154,266
Interest expense 13,136 14,024
Income tax expense 10,045 9,146
Total costs and expenses 734,055 573,772
Net income $ 38,634 $ 35,976
Earnings per share $ 2.38 $ 2.21

(1-a) Compute days' sales uncollected. (1-b) For each ratio, determine if it improved or worsened in the current year.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

SEO Competitor Audit Journal

Authors: Nelz Plummer

1st Edition

B09DDWJGRC, 979-8459748123

More Books

Students also viewed these Accounting questions