Question

Simon Company’s year-end balance sheets follow.

At December 31	2017			2016			2015
Assets
Cash	$	27,904		$	32,617		$	34,676
Accounts receivable, net		89,700			62,600			59,700
Merchandise inventory		113,000			83,000			54,000
Prepaid expenses		8,986			8,562			3,853
Plant assets, net		247,981			233,541			208,871
Total assets	$	487,571		$	420,320		$	361,100
Liabilities and Equity
Accounts payable	$	117,763		$	68,903		$	46,235
Long-term notes payable secured by mortgages on plant assets		88,913			93,773			77,409
Common stock, $10 par value		162,500			162,500			162,500
Retained earnings		118,395			95,144			74,956
Total liabilities and equity	$	487,571		$	420,320		$	361,100

The company’s income statements for the years ended December 31, 2017 and 2016, follow. Assume that all sales are on credit:

For Year Ended December 31	2017						2016
Sales				$	633,842					$	500,181
Cost of goods sold	$	386,644					$	325,118
Other operating expenses		196,491						126,546
Interest expense		10,775						11,504
Income taxes		8,240						7,503
Total costs and expenses					602,150						470,671
Net income				$	31,692					$	29,510
Earnings per share				$	1.95					$	1.82
(1) Compute days' sales uncollected. Days' Sales Uncollected X Days - Days' Sales Uncollected 1 Choose Denominator: Current assets Choose Numerator: Net sales 2017: 2016: Days' Sales Uncollected 0 days 0 days

Answer 1

Requirement: 1 Years / 1 Numerator Accounts Receivable 89700 62600 Days sales Uncollected Denominator X Net Sales x 633842 x 500181 X Days = | 365 = 365 365 Days Sales Uncollected Days Sales Uncollected 51.7 45.7 days 2017 days 2016 Requirement: 2 Year Numerator Net Credit sales 633842 500181 Accounts Recievable Turn over ratio Denominator Average Account Recievable 76150 61150 Account Recievable ratio = | Account Recievable ratio 8.3 times 8.2 times 2017 2016

Requirement: 3 Year Numerator Cost of goods sold 386644 325118 Inventory turn over ratio Denominator Average Inventory 98000 68500 Inventory Turn over ratio Inventory Turn over ratio 3.9 times 4.7 times 2017 2016 Requirement: 4 Year 1 Numerator Ending Inventory 113000 83000 Days in inventory Denominator X Cost of goods sold x 386644 325118 x Days 365 365 365 Days in inventory Days in inventory 106.7 days 93.2 days 2017 2016 7 |