Answered step by step
Verified Expert Solution
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 | $ | 37,056 | $ | 43,315 | $ | 43,368 | |||||
Accounts receivable, net | 89,500 | 62,700 | 51,500 | ||||||||
Merchandise inventory | 114,000 | 84,500 | 57,000 | ||||||||
Prepaid expenses | 11,933 | 11,370 | 4,819 | ||||||||
Plant assets, net | 357,289 | 323,786 | 268,613 | ||||||||
Total assets | $ | 609,778 | $ | 525,671 | $ | 425,300 | |||||
Liabilities and Equity | |||||||||||
Accounts payable | $ | 156,390 | $ | 91,504 | $ | 57,824 | |||||
Long-term notes payable secured by mortgages on plant assets | 118,077 | 124,531 | 96,811 | ||||||||
Common stock, $10 par value | 162,500 | 162,500 | 162,500 | ||||||||
Retained earnings | 172,811 | 147,136 | 108,165 | ||||||||
Total liabilities and equity | $ | 609,778 | $ | 525,671 | $ | 425,300 | |||||
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 | $ | 792,711 | $ | 625,548 | ||||||||
Cost of goods sold | $ | 483,554 | $ | 406,606 | ||||||||
Other operating expenses | 245,740 | 158,264 | ||||||||||
Interest expense | 13,476 | 14,388 | ||||||||||
Income tax expense | 10,305 | 9,383 | ||||||||||
Total costs and expenses | 753,075 | 588,641 | ||||||||||
Net income | $ | 39,636 | $ | 36,907 | ||||||||
Earnings per share | $ | 2.44 | $ | 2.27 | ||||||||
(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
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started