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 $ 31,800 $ 35,625 $ 37,800 Accounts receivable, net 89,500 62,500 50,200 Merchandise inventory 112,500 82,500 54,000 Prepaid expenses 10,700 9,375 5,000 Plant assets, net 278,500 255,000 230,500 Total assets $ 523,000 $ 445,000 $ 377,500 Liabilities and Equity Accounts payable $ 129,900 $ 75,250 $ 51,250 Long-term notes payable secured bymortgages on plant assets 98,500 101,500 83,500 Common stock, $10 par value 163,500 163,500 163,500 Retained earnings 131,100 104,750 79,250 Total liabilities and equity $ 523,000 $ 445,000 $ 377,500 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 $ 673,500 $ 532,000 Cost of goods sold $ 411,225 $ 345,500 Other operating expenses 209,550 134,980 Interest expense 12,100 13,300 Income taxes 9,525 8,845 Total costs and expenses 642,400 502,625 Net income $ 31,100 $ 29,375 Earnings per share $ 1.90 $ 1.80 (4) Compute days' sales in inventory.

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter5: Accounting For Retail Businesses

Section: Chapter Questions

Problem 41E: Cost of goods sold and related items The following data were extracted from the accounting records...

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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	$	31,800		$	35,625	$	37,800
Accounts receivable, net		89,500			62,500		50,200
Merchandise inventory		112,500			82,500		54,000
Prepaid expenses		10,700			9,375		5,000
Plant assets, net		278,500			255,000		230,500
Total assets	$	523,000		$	445,000	$	377,500
Liabilities and Equity
Accounts payable	$	129,900		$	75,250	$	51,250
Long-term notes payable secured by mortgages on plant assets		98,500			101,500		83,500
Common stock, $10 par value		163,500			163,500		163,500
Retained earnings		131,100			104,750		79,250
Total liabilities and equity	$	523,000		$	445,000	$	377,500

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			$	673,500			$	532,000
Cost of goods sold	$	411,225			$	345,500
Other operating expenses		209,550				134,980
Interest expense		12,100				13,300
Income taxes		9,525				8,845
Total costs and expenses				642,400				502,625
Net income			$	31,100			$	29,375
Earnings per share			$	1.90			$	1.80

(4) Compute days' sales in inventory.

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