Question

Simon Company's year-end balance sheets follow $ 26,172$30,593 $30,930 58,800 83,50056,000 89,700 110,000 8,428 62,800 Accounts receivable, net se inventory 3,437 200,597 189,987 157,133 $ 434,897 $374,911 $ 306,30e 8,031 Prepaid expenses Total assets Liabilities and Equity Accounts payable Long-term notes payable secured by $ 110,455 $ 64,627$ 41,240 mortgages on plant assets Common stock, $1e par value Retained earnings Total liabilities and equity 83,396 87,954 69,046 162,500 162,500 162,500 33,514 $ 434,897 $ 374,911 $306,300 78,546 59,830 The company's income statements for the years ended December 31, 2017 and 2016, follow. Assume that all sales are on credit 2017 2016 5 Sales Cost of goods sold Other operating expenses Interest expense Income taxes Total costs and expenses Net income $ 565,366 s 446,144 289,994 112,874 10,261 6,692 344,873 175,263 9,611 7,350 537,097 $ 28,269 ー419,821 $ 26,323 Earnings per share 1.62 ompute days' sales uncollected 串446,144 $565,366 Sales Cost of goods sold Other operating expenses Interest expense Income taxes Total costs and expenses Net income $ 289,994 112,874 10,261 6,692 344,873 175,263 9,611 7,350 419,821 $26,323 $1.62 537.097 $28,269 $1.74 Earnings per share (1) Compute days' sales uncollected. Days' Sales U Choose Numerator Choose Denominator: x Days Days' Sales Uncollected Days Sales Uncollected 2017 O days 0 days 2016: 4 5 6 of 12Next>

Answer 1

2016

Average accounts receivable = (Beginning accounts receivable + Ending accounts receivable)/2

= (58,800 + 62,800)/2

= $60,800

Accounts receivable turnover = Net credit sales/Average accounts receivables

= 446,144/60,800

= 7.34 times

Days' sales uncollected = 365/Accounts receivable turnover

= 365/7.34

= 50 days (Rounded to nearest whole number)

2017

Average accounts receivable = (Beginning accounts receivable + Ending accounts receivable)/2

= (62,800 + 89,700)/2

= $76,250

Accounts receivable turnover = Net credit sales/Average accounts receivables

= 565,366/76,250

= 7.41 times

Days' sales uncollected = 365/Accounts receivable turnover

= 365/7.41

= 49 days (Rounded to nearest whole number)

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Exact answers may slightly differ due to rounding off.