Simon Company’s year-end balance sheets follow. At December 31201720162015Assets 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 3120172016Sales $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 (3) Compute inventory turnover.

Inventory turnover can be defined as the efficiency ratio ratio that determine how many times a…

Answered: Simon Company’s year-end balance sheets…

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter3: The Basics Of Record Keeping And Financial Statement Preparation: Income Statement

Section: Chapter Questions

Problem 34P

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Question

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: