Question

Required Information The following information applies to the questions displayed below. Simon Company's year-end balance sheets follow. At December 31 1 Yr Ago 2 Yrs Ago Current Yr Assets Cash Accounts receivable, net Merchandise inventory Рrеpaid exреnses Plant assets, net 33,648 $ 28,786 9,480 115,eee 9,27e 245,448 34,78e se,48e ве, еее 3,856 281,544 62,880 вз,еве 8,833 232, 319 428,680 Total assets 487,896 350, see Liabilities and Equity Accounts payable Long-tern notes payable secured by mortgages on plant assets Cormon stock, $1e par value Retained earnings Total liabilities and equity 121,486 71,e81 46,266 96,738 91,724 162,5ee 112,186 77,461 162,5ee 64,273 162,580 98,281 428,6ee $ 358, see S 487,896 The company's income statements for the Current Year and 1 Year Ago, follow. Assume that all sales are on credit For Year Ended Decerber 31 Sales 1 Yr Ago Current Yr S 634,265 see,514 Cost of goods sold Other operating expenses Interest expense Incore tax expense $ 386,982 S 325,334 126,638 11,512 7,588 196,622 18,783 8,245 Total costs and expenses 682,552 478,984 Net incore 31,713 29,530 Earnings per share 1.95 1.82 (1-a) Compute deays sales uncollected. (1-b) For each ratio, determine if it improved or worsened in the current year. Complete this question by entering your answers in the tabs below. Required 1A Required 18 Compute days' sales uncollected. Days' Sales Uncollected Choose Denominator: x Days Daye' Sales Uncollected Choose Numerator: Days' Sales Uncollected days Current Yr: 1 Yr Ago: days х Required 1A Required 1B

Answer 1

cla, days' Sales Uncollected Choose Choose Days Sales Numerator: 17 Denominator: X Days = Uncollected Accounts Days sales Receivable 1 Net sales & 365 = Uncollected $89,400 $634,265 x 365 = 51.4 days $62,000 $500,514 x 365 = 45.8 days 1 Yr Ago: albo Days' sales Uncollected worsen da) Accounts Receivable Turnover Choose I Choose I Accounts Numerator: 17 Denominator = Recuvable Turnover Average Net Sales Accounts Accounts - Receivable, net -Receivable Turnover $ 634,265 1 $ 76,100 = 8.3 times $ 500, 514 & 56, 600 = 8.8 times Current Yr: $ 500, 514 1 Yr Ago:

calculation: Average Accounts Receivable = (Beginning Accounts Receivable + Ending Accounts Receivable) 2 Current year? 2 ($62,800 + $89, 400) + 2 = $76,100 1 Yr Ago: 2) ($50,400 + $ 62,800) + 2 2 $56,600

(2b) Accounts Receivable Turnover Worsen 3a) Inventory Choose Numerator: / Cost of goods sold 17 $ 386,902 1 $325,334 1 Turnover Choose Denominator: - Average inventory $99,000 = $71,500 = = Inventory Turnover Inventory Turnover 3.9 times 4.6 times Current Yri 1 Yr Ago: calculation: Average Inventory = (Beginning Inventory & Ending Inventory) = 2

Current You 2) ($83,000 & $ 115,000 - 2 2 $ 99,000 1 Yr Ago? 2) ($60,000+ $83,000) = 2 2 $71,500 (36) Inventory Turnover worsen

Ya, Days' sales in Inventory Days' sales Choose Choose Numerator Denominator & rx Days = in Inventory cost of Days sales Ending Inventory / goods sold & Days in Inventory Current Yril $ 115,000 1 $306,902 x 365 $386,902 x 360 = 108.5 days A $ 83,000 / $325,334 × 365= 93.1 days чь) Days' sales in Inventory worsen