Question

Required information (The following information applies to the questions displayed below.] Simon Company's year-end balance sheets follow. Current Yr At December 31 Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity Accounts payable Long-term notes payable secured by mortgages on plant assets Common stock, $10 par value Retained earnings Total liabilities and equity $ 35,306 89,300 110,000 11,370 340,702 $586,678 1 Yr Ago 2 Yrs Ago $ 41,270 $ 41,725 62,300 51,800 84,000 57,000 10,833 4,636 307, 354 258,039 $ 505,757 $ 413,200 $149,004 $ 87,182 $ 55,633 112,501 162,500 162,673 $586,678 118,651 93,144 162,500 162,500 137, 424 101,923 $ 505,757 $ 413,200 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 Sales Cost of goods sold Other operating expenses Interest expense Income tax expense Total costs and expenses Net income Current Yr $ 762,681 $ 465, 235 236, 431 12,966 9,915 724,547 $ 38,134 1 Yr Ago $ 601,851 $ 391,203 152, 268 13,843 9,028 566,342 $ 35,509 Earnings per share $ 2.35 $ 2.19

Answer 1

Requirement: 4a Year х Numerator Ending Inventory 110000 Days Sales in inventory 7 Denominator / Cost of goods sold / 465235 / 391203 Days 365 х х Days Sales in inventory Days Sales in inventory 86.3 days 78.4 days 365 Current Year 1 Year Ago 84000 х 365 Requirement: 4b Worse

Requirement: 1 Years Current ratio Denominator Current liabilities 1 26454 7 22427 7 21823 Numerator Current assets 62149 41597 55605 Current ratio Current ratio 2.35|to1 2019 2018 = Il 1.85 to1 2017 2.55|to1

Requirement: 2 KORBIN COMPANY Common size Comparative Statement For years Ended December 31, 2019, 2018, and 2017 2019 2018 Sales 100.00 % 100.00 % Cost of goods sold 60.20% 63.30 % Gross profit 39.80% 36.70% Selling expenses 14.20 % 13.801% Administrative expenses 9.001% 8.801% Total expenses 23.20 % 22.60% Income before taxes 16.60% 14.10 % Income taxes 3.09% 2.89% Net Income 13.51 % 11.21 % 2017 100.00 % 64.00 % 36.00 % 13.20 % 8.30 % 21.50 % 14.50 % 2.94% 11.56 %