Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Simon Companys year-end balance sheets follow. At December 31 Current Year 1 Year Ago 2 Years Ago Assets Cash $ 35,076 $ 41,000 $ 41,452

Simon Companys year-end balance sheets follow.

At December 31 Current Year 1 Year Ago 2 Years Ago
Assets
Cash $ 35,076 $ 41,000 $ 41,452
Accounts receivable, net 89,300 62,800 50,900
Merchandise inventory 113,000 83,000 59,000
Prepaid expenses 11,296 10,763 4,606
Plant assets, net 334,172 304,889 254,542
Total assets $ 582,844 $ 502,452 $ 410,500
Liabilities and Equity
Accounts payable $ 148,031 $ 86,613 $ 55,270
Long-term notes payable 111,766 117,875 92,535
Common stock, $10 par value 162,500 162,500 162,500
Retained earnings 160,547 135,464 100,195
Total liabilities and equity $ 582,844 $ 502,452 $ 410,500

The company’s income statements for the current year and one year ago follow. Assume that all sales are on credit:

For Year Ended December 31 Current Year 1 Year Ago
Sales $ 757,697 $ 597,918
Cost of goods sold $ 462,195 $ 388,647
Other operating expenses 234,886 151,273
Interest expense 12,881 13,752
Income tax expense 9,850 8,969
Total costs and expenses 719,812 562,641
Net income $ 37,885 $ 35,277
Earnings per share $ 2.33 $ 2.17

(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

Auditing Assurance Services and Ethics in Australia an Integrated Approach

Authors: Alvin A Arens, Peter J. Best, Greg Shailer, Brenton Fiedler

9th edition

978-1442539365, 1442539364

More Books

Students also viewed these Accounting questions

Question

=+2. What different types of products exist in the book industry?

Answered: 1 week ago