Question

Check my workCheck My Work button is now enabled2

Item 4

Item 4 Part 4 of 4 1.5 points Item Skipped

Time Remaining 2 hours 24 minutes 8 seconds

02:24:08

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
Assets
Cash	$	33,443		$	39,092		$	41,136
Accounts receivable, net		89,200			62,600			55,400
Merchandise inventory		115,000			85,000			56,000
Prepaid expenses		10,770			10,262			4,571
Plant assets, net		329,991			301,670			266,893
Total assets	$	578,404		$	498,624		$	424,000
Liabilities and Equity
Accounts payable	$	141,142		$	82,582		$	54,849
Long-term notes payable secured by mortgages on plant assets		106,565			112,390			91,830
Common stock, $10 par value		162,500			162,500			162,500
Retained earnings		168,197			141,152			114,821
Total liabilities and equity	$	578,404		$	498,624		$	424,000

The company’s income statements for the years ended December 31, 2017 and 2016, follow. Assume that all sales are on credit:

For Year Ended December 31	2017						2016
Sales				$	751,925					$	593,363
Cost of goods sold	$	458,674					$	385,686
Other operating expenses		233,097						150,121
Interest expense		12,783						13,647
Income taxes		9,775						8,900
Total costs and expenses					714,329						558,354
Net income				$	37,596					$	35,009
Earnings per share				$	2.31					$	2.15

(4) Compute days' sales in inventory.

Answer 1

Inventory Turnover & - Cost of Goods sold Aug inventory for year-2017 Average inventosys 15000+ 85000 2 = 100000 4 58674 Ioveotosy Turnoves 100 000 Inventary Turnoves = 4.59 times) foa year 2016 Average Coventory: 85000+ 56000 - 705000 Inventory Tuenoves- 385686 7050 Inventory Turnover & 5.47

Days sales inventory = 365 - Inventoay Turnoves Days sales inventasy - 365 fos 2017 4.59 = 79.52 days 20 Days Sales inventory None 365 9 2016 5.47 - 67.73 days.