Question

Chapter 13 Homepage Managerial Acetil apter 13 Homework Required information The following information applies to the questions displayed below.) Simon Company's year-end balance sheets follow At December 31 2017 2016 2015 Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total asete Liabilities and Equity $ 29,951 $ 35,010 $ 37.221 89.300 62,900 51,200 111,500 84,500 57.000 9,645 9,190 4,136 282.957 259,566 238,043 $ 523,353 $ 451.166 $ 387,600 $ 126,405 73,960 $ 49.628 Long-term totes payable secured by mortgages on plant annet Common stock, $10 par value Retained earnings Total liabilities and equity 95, 439 100.655 162,500 162,500 139,009 114,051 $ 523,353 $ 451, 166 8 3,090 162,500 92282 387,600 The company's income statements for the years ended December 31, 2017 and 2016, follow. Assume that all sales a credit For Year Ended December 31 2017 $ 680,359 $ 415,019 $ 536,888 Cost of goods sold Other operating expenses Interest expense $ 348,977 135,833 8,053 Total costs and expenses 646,341 $ 34,018 Earnings per share < Prev 5 6 7 8 of 8 Next > MacBook Pro

Answer 1

Days' sales uncollected is a liquidity ratio that is used to estimate the number of days before receivables will be collected. The formula is:

(Average accounts receivable ÷ Net annual credit sales) x 365 = Days sales uncollected

Days Sales Uncollected choose Sales Numerator: / Choose Denominator & Days Days Uncollected Average Accounts Net Annual Credit x 365 = Days Sales Recuerables sales I uncollected $ 76 100 $ 680,359 x 365 = (40-83) 41 Days $57,050 I $536,888 * 365 = (38.79) 39 | Days 2017 2016 workings & Average accounts receivables – Opening balance & closing balance 2 ($ 62,900 + $ 89,300) 2017 - $76.100 2016 ($51.200 + $ 62,900) $ 57,050