Required information Skip to question [The following information applies to the questions displayed below.] Simon Company’s year-end balance sheets follow. At December 31 Current Yr 1 Yr Ago 2 Yrs Ago Assets Cash $ 33,973 $ 39,712 $ 40,150 Accounts receivable, net 89,900 62,100 50,700 Merchandise inventory 110,500 84,500 52,000 Prepaid expenses 10,941 10,424 4,461 Plant assets, net 319,214 289,926 250,289 Total assets $ 564,528 $ 486,662 $ 397,600 Liabilities and Equity Accounts payable $ 143,379 $ 83,891 $ 53,533 Long-term notes payable secured by mortgages on plant assets 108,254 114,171 89,627 Common stock, $10 par value 162,500 162,500 162,500 Retained earnings 150,395 126,100 91,940 Total liabilities and equity $ 564,528 $ 486,662 $ 397,600 The company’s 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 $ 733,886 $ 579,128 Cost of goods sold $ 447,670 $ 376,433 Other operating expenses 227,505 146,519 Interest expense 12,476 13,320 Income tax expense 9,541 8,687 Total costs and expenses 697,192 544,959 Net income $ 36,694 $ 34,169 Earnings per share $ 2.26 $ 2.10 (4-a) Compute days' sales in inventory. (4-b) For each ratio, determine if it improved or worsened in the current year. Compute days' sales in inventory. Days’ Sales In Inventory Choose Numerator: / Choose Denominator: x Days = Days’ Sales In Inventory / x = Days’ sales in inventory Current Yr: / x = days 1 Yr Ago: / x = days

Required information Skip to question [The following information applies to the questions displayed below.] Simon Company’s year-end balance sheets follow. At December 31 Current Yr 1 Yr Ago 2 Yrs Ago Assets Cash $ 33,973 $ 39,712 $ 40,150 Accounts receivable, net 89,900 62,100 50,700 Merchandise inventory 110,500 84,500 52,000 Prepaid expenses 10,941 10,424 4,461 Plant assets, net 319,214 289,926 250,289 Total assets $ 564,528 $ 486,662 $ 397,600 Liabilities and Equity Accounts payable $ 143,379 $ 83,891 $ 53,533 Long-term notes payable secured by mortgages on plant assets 108,254 114,171 89,627 Common stock, $10 par value 162,500 162,500 162,500 Retained earnings 150,395 126,100 91,940 Total liabilities and equity $ 564,528 $ 486,662 $ 397,600 The company’s 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 $ 733,886 $ 579,128 Cost of goods sold $ 447,670 $ 376,433 Other operating expenses 227,505 146,519 Interest expense 12,476 13,320 Income tax expense 9,541 8,687 Total costs and expenses 697,192 544,959 Net income $ 36,694 $ 34,169 Earnings per share $ 2.26 $ 2.10 (4-a) Compute days' sales in inventory. (4-b) For each ratio, determine if it improved or worsened in the current year. Compute days' sales in inventory. Days’ Sales In Inventory Choose Numerator: / Choose Denominator: x Days = Days’ Sales In Inventory / x = Days’ sales in inventory Current Yr: / x = days 1 Yr Ago: / x = days

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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[The following information applies to the questions displayed below.]

Simon Company’s year-end balance sheets follow.

At December 31	Current Yr	1 Yr Ago	2 Yrs Ago
Assets
Cash		$	33,973	$	39,712	$	40,150
Accounts receivable, net			89,900		62,100		50,700
Merchandise inventory			110,500		84,500		52,000
Prepaid expenses			10,941		10,424		4,461
Plant assets, net			319,214		289,926		250,289
Total assets		$	564,528	$	486,662	$	397,600
Liabilities and Equity
Accounts payable		$	143,379	$	83,891	$	53,533
Long-term notes payable secured by mortgages on plant assets			108,254		114,171		89,627
Common stock, $10 par value			162,500		162,500		162,500
Retained earnings			150,395		126,100		91,940
Total liabilities and equity		$	564,528	$	486,662	$	397,600

The company’s 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			$	733,886			$	579,128
Cost of goods sold	$	447,670			$	376,433
Other operating expenses		227,505				146,519
Interest expense		12,476				13,320
Income tax expense		9,541				8,687
Total costs and expenses				697,192				544,959
Net income			$	36,694			$	34,169
Earnings per share			$	2.26			$	2.10

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

Compute days' sales in inventory.

Days’ Sales In Inventory
	Choose Numerator:	/	Choose Denominator:	x	Days	=	Days’ Sales In Inventory
		/		x		=	Days’ sales in inventory
Current Yr:		/		x		=		days
1 Yr Ago:		/		x		=		days

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